The research project for the second phase of Project Hamilton, which focused on exploring the technical feasibility of implementing a potential central bank digital currency (CBDC) in the United States, is complete.
The Federal Reserve Bank of Boston (FRBB) announced the completion of Project Hamilton, a two-year collaboration with the Massachusetts Institute of Technology (MIT). The main goal of the project was to explore the use of existing and new technologies to build and test a theoretical platform for a CBDC.
What Is a CBDC?
A central bank digital currency (CBDC) is a digital form of sovereign money issued and backed by a country’s central bank. Unlike cryptocurrencies, CBDCs are centralized and represent a direct liability of the issuing monetary authority. Governments and central banks around the world have explored CBDCs as a way to modernize payment systems and improve financial infrastructure.
Early this year, the first phase of the initiative was completed, focusing on the development of a core transaction processor for a theoretical digital currency. This resulted in the development of open-source research software, OpenCBDC. The code has two versions, but only one is based on distributed ledger technology (DLT).
In February 2022, the project team began developing and testing a theoretical digital currency based on OpenCBDC. The second phase of Project Hamilton was primarily intended to explore the technical feasibility of combining important features such as security, audit capabilities, programmability, interoperability, and more within the CBDC platform.
Key Areas Explored by Project Hamilton
During the second phase of Project Hamilton, researchers focused on several key technical requirements for a potential digital dollar:
- Transaction security
- Auditability and transparency
- Programmability
- Interoperability with existing financial systems
- Scalability and performance
FRBB Executive Vice President Jim Cunha said the second phase of the initiative had also been completed and “additional retrospectives on Project Hamilton’s findings” would be released in the coming months. FRBB also stated that OpenCBDC testing was still ongoing, and the team was ready to report on the successes, but wasn’t ready to complete the project. Project Hamilton will most likely be extended for another phase in 2023.
It’s worth noting that Project Hamilton drew the attention of some U.S. congressmen who voiced their indignation over the participation of private sector representatives. The lawmakers pointed out that there is an “unfair advantage” for study participants in the future development of a CBDC. FRBB President Susan Collins didn’t confirm private sector participation in the project, but she didn’t deny such allegations either.
The Future of a U.S. Digital Dollar Remains Uncertain
Although Project Hamilton demonstrated the technical feasibility of a potential CBDC platform, the United States has not committed to issuing a digital dollar. Policymakers, regulators, and lawmakers continue to debate the potential benefits and risks of a CBDC, including privacy concerns, financial stability implications, and the role of commercial banks in a digital currency ecosystem.
Recall that the New York Innovation Center (NYIC) began testing the CBDC’s interoperability with commercial banks’ digital assets as part of the RLN payment system.
FAQ About the U.S. CBDC
No. As of 2026, the U.S. has not issued a central bank digital currency.
Project Hamilton was a research initiative led by the Federal Reserve Bank of Boston and MIT to explore the technical feasibility of a potential U.S. CBDC.
No. OpenCBDC is research software created to test technical concepts and does not represent an operational CBDC.
Policymakers remain divided on issues such as privacy, financial stability, regulatory oversight, and the impact a digital dollar could have on the banking system.
