The Federal Reserve is stepping up its exploration of a U.S. central bank digital currency, with at least two digital dollar prototypes nearing completion. The systems are being developed by the Federal Reserve Bank of Boston in partnership with the Massachusetts Institute of Technology, and early research results could be unveiled as soon as July.
Prototypes Aim to Test Core CBDC Functions
James Cunha, who leads the Boston Fed project, said the team expects to present part of its work in the third quarter, including at least two software platforms designed to move, store, and settle transactions conducted in digital dollars. Once released, the code is also expected to be available for others to inspect and build upon.
This suggests the Fed’s immediate goal is not to launch a retail digital dollar right away, but to demonstrate what is technically possible and provide a foundation for broader policy discussions.
Major Policy Questions Remain Unresolved
Even as the technical work advances, several core questions remain open. Cunha said the Fed, the Treasury, and Congress still need to determine whether the central bank should host customer accounts directly, whether some degree of anonymity should be permitted, and what protections consumers would receive in the event of cyberattacks or mistaken transactions.
He stressed that the current research is intended to show possible models rather than take a position on those issues. In his view, waiting for the policy debate to conclude before beginning technical development would leave the United States roughly a year or more behind. He also noted that any eventual rollout would require extensive industry outreach and serious public debate.
Powell Says Congressional Backing Is Essential
Federal Reserve Chair Jerome Powell has previously described the digital dollar as a “very high priority project” for the central bank. Speaking during a Bank for International Settlements event on central bank digital innovation, he said the Fed would only move forward with broad support from elected leaders and the public.
Powell made clear that the Fed would not proceed without support from Congress, and that the preferred route would be an authorizing law rather than relying on an expansive interpretation of existing statutes. That means the future of a digital dollar will depend not only on technological readiness, but also on legal authority, regulatory design, and political consensus in the United States.