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Project Hamilton is a collaborative research project between the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology’s Digital Currency Initiative. The project is focused on studying the feasibility of a hypothetical central bank digital currency, not implementing one.
The Federal Reserve says on its website that its research into central bank digital currency is a way to explore safe payment options, not to reduce or replace cash.
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Warning! This warning is made possible by social media accounts that have their facts wrong: A complete overhaul of the U.S. central banking system is coming soon.
"Every dollar you have is in imminent danger" because of an "obscure" Federal Reserve research project called Project Hamilton, one such Sept. 13 Facebook video claimed.
"The worst could be just around the corner: a full confiscation of every dollar you hold in your bank account, your wallet and even your retirement to be replaced with a dangerous new totally digital dollar," it said.
The situation sounds scary. But it’s wrong.
This post was flagged as part of Meta’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Meta, which owns Facebook and Instagram.)
Screengrab from Facebook
The post linked to "The Dollar’s Final Deathblow," a site that claims Project Hamilton "will launch a trackable digital dollar that puts every penny in your bank and retirement accounts in grave danger." It includes an hourlong video in which cryptocurrency trader and former hedge fund manager Ian King discusses this supposed government takeover of the U.S. dollar.
But there is no evidence that the Federal Reserve, the United States’ central bank, plans to replace the country’s currency with a "digital dollar." PolitiFact has debunked multiple claims about digital currency replacing cash and the government seizing control of people’s purchases.
Project Hamilton is a multiyear collaborative research project between the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology’s Digital Currency Initiative. The goal of the project, which began in 2020, is exploring the feasibility of a central bank digital currency, or CBDC.
The Federal Reserve defines a central bank digital currency as "a digital form of central bank money that is widely available to the general public." This is different from managing money through online bank accounts or payment apps, which have long been available to Americans. Instead, a central bank digital currency would be the Federal Reserve’s responsibility, rather than a commercial bank.
But the Federal Reserve has not decided to replace cash with a central bank digital currency. On its website, the Federal Reserve says it is "committed to ensuring the continued safety and availability of cash and is considering a central bank digital currency as a means to expand safe payment options, not to reduce or replace them."
Federal Reserve Chairman Jerome Powell has repeatedly said that congressional approval would be necessary to institute a central bank digital currency.
Through Project Hamilton, Boston Fed and MIT researchers studied a hypothetical central bank digital currency’s challenges, opportunities, risks and trade-offs. It’s unclear where the project stands. Neither the Boston Fed nor MIT responded to PolitiFact’s request to clarify the project’s status.
The Boston Fed said in December 2022 that this joint research project with MIT was "now complete." MIT’s Digital Currency Initiative FAQ page says Project Hamilton is entering its second phase, which focuses on investigating a hypothetical central bank digital currency’s technical design.
"We’re not at the stage of making any real decisions. What we’re doing is experimenting," Powell said during a March 8 House Committee on Financial Services hearing. "We haven’t decided that this is something that the financial system in the country wants or needs."
We rate the claim that people’s money will be confiscated and replaced with "a dangerous new totally digital dollar" False.
The Federal Reserve, "Central Bank Digital Currency (CBDC)," April 11, 2023
Massachusetts Institute of Technology’s Digital Currency Initiative, "Project Hamilton - Building a Hypothetical Central Bank Digital Currency," accessed Sept. 25, 2023
Massachusetts Institute of Technology’s Digital Currency Initiative, "OpenCBDC FAQs," accessed Sept. 25, 2023
The Federal Reserve Bank of Boston, "Boston Fed, MIT complete research project into feasibility of a central bank digital currency," Dec. 22, 2022
The Federal Reserve Bank of Boston, "Project Hamilton Phase 1 Executive Summary," Feb. 3, 2022
YouTube, House Committee on Financial Services hearing, March 8, 2023
PolitiFact, "Ron DeSantis’ baseless theory that the government wants to control people’s purchases," April 12, 2023
PolitiFact, "No, banks are not being forced to hand over physical currency to the government," Sept. 19, 2022
PolitiFact, "No, the FedNow Service is not replacing cash. It’s an instant payment system.," April 4, 2023
MIT Technology Review, "Is the digital dollar dead?," July 21, 2023
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