Meet Neha Narula, the MIT researcher who helps senators understand digital currencies

This new line of research presents little conflict at DCI; After all, many researchers there are interested in cryptocurrency because it eliminates the need for banks or government financial institutions. But Narula has found a way to bring crypto enthusiasts to the table with central bankers and to talk about what lessons Bitcoin can hold for the design of a bank-backed digital currency.

Narula sees DCI as a neutral territory. “These worlds are very different, the cryptocurrency world and the central banking world,” she says. “We see ourselves in a bridge-like part.”

It’s not always easy. “There’s a real tension,” says Shira Frank, DCI’s strategic adviser.

When Frank first began researching the digital currency, in 2018, he realized that cryptocurrency had become too toxic and worried that the technology might not be saved. “It’s going in the wrong direction so far,” she recalls thinking.

But Narula told Frank that cryptocurrency still has unusable potential, and much of its toxicity has emerged due to its widespread failure to predict the most negative consequences amidst its hasty development. Narula says we are now dealing with everything we have done through this inadequate planning but we can use what we learn from crypto errors to design new digital currencies that can better serve people.

Narula says bitcoin research helps her team answer basic questions about other types of cryptocurrencies as well as CBDC. She says the current financial system should make it possible to design CBDCs to work for “those who are often the most disadvantaged”. Properly covered, it will withstand a great deal of adverse conditions.

Earlier this year, Project Hamilton launched its design for a fast payment processor that could handle 1.7 million transactions per second, apparently paving the way for the US to launch CBDC. Then, in March, President Joseph Biden issued an executive order to advance CBDC research, a bid to keep the United States ahead of other nations in the race for financial technology.

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Biden expects a technical assessment of what is needed to design the CBDC by September, and Project Hamilton will report that policy. The US is not the only country turning to DCI; Narula says the group has recently started advising other countries on CBDCs as well. There are still unanswered questions when it comes to adopting them, she adds.

Narula’s top concern for any new digital currency – be it CBDC or cryptocurrency – is to ensure that it protects the user’s privacy. It is looking at what happens to China’s CBDC, which has already been used to conduct billions of dollars in transactions. Experts note that China could eventually use it in conjunction with the country’s social financing system (which uses citizens’ financial data to score their credibility), warning that this could significantly increase social surveillance in the country and give the government new levels of control. Can allow. It can deny citizens access to their own money in response to their social media posts.

No one knows how it will all work out. But to help Narula navigate this new future, DCI plans to get there through the shining bitcoin sign in the office. “We want to understand the effects of different technology designs,” she says, “whether ready or not, money is really changing.”

Ashley Belanger is a Chicago-based freelance science journalist,

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