Rumor: Hedera (HBAR) is working with the central bank on the digital dollar?
- The US Federal Reserve has announced that it will examine a central bank digital currency (CBDC).
- The central bank has created the conditions for the introduction of the digital dollar.
- Hedera is one of the platforms reportedly working on the CBDC.
- Hedera is supported by Google (NASDAQ :), IBM (NYSE :), Boeing (NYSE 🙂 and LG Electronics.
A big buzz in the crypto space was the introduction of a digital central bank currency (CBDC). According to a report by the Bank for International Settlements, more than 80% of central banks around the world are already studying the prospects of a CBDC.
Central banks are catching up as most global payments are now digital and many companies are accepting cryptos. However, a central bank digital currency would provide low-risk, central-bank-backed money – think of it like regular cash updated only for the digital financial system.
Countries like China and Sweden point the way to the introduction of a CBDC. The United States was not left behind, and Jess Cheng, Senior Counsel for the Federal Reserve, outlined some of the requirements for a digital dollar in February.
The Federal Reserve and the move towards a CBDC
In September 2020, two Congressmen, French Hill and Bill Foster, penned a letter asking if the central bank had examined the possibility of a CBDC and, if it had not, asked it to consider it. The central bank has not only caught up, but also created the conditions for a CBDC.
According to the Federal Reserve, every CBDC needs technology that ensures the integrity of the system and supports the robustness and resilience of operations. Since the Fed’s memo was released, rumors have risen about which networks could be used for the task, with much speculation aimed at Hedera.
As early as February 2020 there were questions about the possibility of building the digital dollar on Hedera. Redditors asked about the possibility and detailed whether central banks can build on Hedera.
Hedera has already been mentioned by countries looking to introduce a CBDC. Hedera was first mentioned in December 2019. In 2019, the National Institute for Smart Government (NISG) published a draft of India’s National Blockchain Strategy.
The NISG proposed a central bank digital rupee (CBDR) for a publicly approved blockchain. The draft suggested that the national blockchain should use a private version of the blockchain such as the Hedera hash graph. This suggests that Hedera is very good at handling the digital dollar.
On the downside
- The trip didn’t always go smoothly for Hedera as the project ran into problems in its breakout year.
- In December 2019, it was reported that some of the Hedera nodes went offline without warning, leading to suspicions that the network is more central than other cryptos.
- After claiming that 4 out of 10 council nodes were down, some community members discarded the token.
Hedera Hashgraph is one of those lesser-known cryptos making their way onto the big stage. The company behind the project, Hedera, aims to solve real-world transaction problems with blockchain.
The project is perhaps best known for offering native token issuance and configurability without smart contracts, making it similar to Polkadot, yet Hedera Hashgraph remains unique.
Hedera’s goal is to become “the new standard for the global token economy”. Part of that goal will be greatly realized when central banks from around the world launch their CBDCs on the Hedera blockchain.
In the meantime, the project has made further progress towards achieving its goal. In February, Standard Bank Group, the largest African bank by assets, announced a partnership with Hedera Hashgraph.
As part of the partnership, the blockchain project will help the bank address issues related to the development of cross-border trade.
By using the blockchain from Hedera, the Standard Bank wants to reduce the bottlenecks and processing times in its network. The blockchain-based project will also help the bank increase the transparency of transactions in its network.
Hedera currently has over 17 companies on the Hedera Governing Council (the body responsible for overseeing the governance of the platform). The main players include Boeing, Deutsche Telekom (OTC :), Google, IBM, LG Electronics and Tata Communications.
Read on on DailyCoin