2018 Series • No. 18–3
Technology, the Nature of Information, and FinTech Marketplace Lending
by J. Christina Wang
The Boston Fed believes that our central bank must stay at the forefront of innovation. Understanding the opportunities that technology may provide to our mission as a central bank is critical to ultimately delivering the best product to our stakeholders. Our team works to not only understand these technologies, but build them in partnership with the world’s leading universities and private sector firms to forward our mission.
Digital currencies are being built by businesses and governments globally, and the Federal Reserve knows it must understand their benefits and tradeoffs in case the Fed is asked to create a digital form of the dollar. A key part of that effort is a collaboration between the Boston Fed and researchers at MIT to investigate how to build a CBDC with the speed, security, privacy, and resiliency required to be a new form of currency for the world’s largest economy. The project focuses specifically on creating a robust hypothetical digital currency to test a variety of realistic scenarios that would arise with the adoption of a digital dollar. The hypothetical digital currency platform will have many of the functions and features of a CBDC production platform, as well as the capacity to scale to real-world production volumes. It will enable the Federal Reserve to best inform the public and policymakers about the merits and challenges of a CBDC.