US Fed And Blockchain Test Operation

The Federal Reserve Board (FRB) of the US central bank on the 13th, details concerning the test of the distributed ledger technology (DLT) which was done in 2019 utilizing the blockchain framework “Hyperledger Fabric” Published.

This test project named “FooWire Project” is based on the case of using DLT for payment. As a result of the tests, the Fed said it has potential for practical use, but emphasizes that there are still many challenges, saying that it will continue to study the possibilities while identifying risks and weaknesses.

FooWire Project is a project to test whether DLT is suitable for payment. He explained that he chose Hyperledger Fabric because it’s a permissive blockchain, it’s for enterprises, and the maturity of the technology meets the requirements of the project team.

Specifically, this test is looking for the possibility of DLT in payment use, the speed of system execution, the simplicity of smart contracts, and the breadth of functions. We are also exploring the need to broaden the experiment to understand if DLT is more widely available and if any DLT platform can be used for payment.

The FooWire Project is limited in size and utilizes a permissioned blockchain that allows participants to be selected. This approach is tailored to current payment systems and explains that it can be more secure than networks that do not require authorization.

It is assumed that the central bank, government agencies, and commercial banks will join the FooWire Project network. The network administrator has the authority to approve account creation and node operation. The only assets that can be moved are temporary assets called “Funds.”

In addition to the DLT test, it was revealed on the 13th that the Fed is collaborating with the Massachusetts Institute of Technology (MIT) in a research project focusing on digital currency (CBDC).

The Federal Reserve Bank of Boston is working with MIT. This is a multi-year project that tests the central bank for digital currencies. The purpose is to evaluate the safety and efficiency of using CBDC.

The Fed’s board director, Lael Brainard, said he would make the findings of the collaboration public and would make the code developed open source so that anyone could use it.

He also said that he has been conducting internal experiments over the past few years and said he has built and tested a wide range of DLT platforms to understand the potential and risks of DLT.

It is not the Fed that makes the final decision on whether to issue a CBDC, but stresses that it is important to understand the implications for legislation in case it is issued.

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The Federal Reserve Board (FRB) of the US central bank on the 13th, details concerning the test of the distributed ledger technology (DLT) which was done in 2019 utilizing the blockchain framework “Hyperledger Fabric” Published.

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