The Digital Dollar Project, which is lead by former US Commodities Futures Trading Commission (CFTC) boss Christopher Giancarlo, has published nine potential scenarios for a US Central Bank Digital Currency (CBDC). Each of the scenarios takes a different approach to how a CBDC would work in the USA, and lays out potential structures that could be used to implement the scenarios. Some of the ideas include proving that digital wallets could meet US federal banking standards, while others suggest the use of atomic swaps for clearing operations on the back-end of the CBDC's network. No action has been taken on any of the proposed ideas so far.
Why it matters: With every major central bank proposing the use of CBDCs, it is only a matter of time before some form of government-issued digital currency hits the markets. One of the biggest issues that CBDCs face is the unregulated nature of cryptos, which makes decentralized currencies far more efficient. The networks that central banks are proposing must fall in-line with existing banking regulations, which will retard the development and use of CBDCs. We may see increased regulatory pressure on major tokens like Ripple, which has a company that can be subjected to government scrutiny. Totally decentralized networks like Bitcoin may be made illegal in major nations, although they are unlikely to suffer because of anti-crypto laws.