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Digital Dollar Project Wraps Up Retail CBDC Pilot with Western Union

The Digital Dollar Project, along with Western Union, explores the potential of CBDCs in revolutionising cross-border remittances, paving the way for a secure and efficient future of global payments

Shashank Bhardwaj
Published: Aug 7, 2023 01:12:51 PM IST
Updated: Aug 7, 2023 04:44:04 PM IST

Digital Dollar Project Wraps Up Retail CBDC Pilot with Western UnionImage: Shutterstock

The Digital Dollar Project (DDP) has reached a significant milestone by completing a pilot study exploring the potential of a central bank digital currency (CBDC) for cross-border remittances. Collaborating with The Western Union Company and BDO Unibank in the Philippines and supported by Accenture, this cutting-edge research is poised to reshape the landscape of international payments.

Amidst the ever-evolving digital payments ecosystem, the DDP's pilot study aimed to assess the benefits of leveraging CBDCs for facilitating cross-border remittances. Partnering with Western Union, a prominent technology-driven global payments player, the study examined the advantages of utilising CBDCs in this crucial aspect of financial transactions.

Utilising distributed ledger technology (DLT), participants meticulously designed and configured a platform to simulate the payment infrastructure required for transferring digital dollars to Philippine pesos. The study's findings have been published in the comprehensive whitepaper titled "Retail Cross-Border Remittance Payments," offering valuable insights into the potential of CBDCs in revolutionising international remittances.

One of the critical distinctions of a U.S. CBDC lies in its issuance and backing by the Federal Reserve, providing a secure and dependable medium for digital money transfers. This innovation could be transformative for individuals and families who rely heavily on remittance payments to meet their essential needs.

The pilot study unearthed several significant benefits, including reduced risk through instant settlement across multiple currencies, optimised cost with atomic CBDC settlements, enhanced customer experience with improved accessibility and portability of digital money, and enhanced transaction visibility.

Jennifer Lassiter, Executive Director of the Digital Dollars Project, highlights the pilot's significance amid evolving CBDC discussions. She emphasises the project's dedication to data-driven insights for real-world applications, engaging stakeholders like financial institutions, policymakers, and technological partners.

As the DDP continues its efforts to shed light on the potential of CBDCs, this pioneering research can redefine how the world approaches international remittances, fostering greater financial inclusion and unlocking new avenues for economic growth. 

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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