Major US Clearing House DTCC Building ‘Project Lithium’ to Test CBDC Real-Time Settlement

April 13, 2022 Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Metaverse, NFTs, Enterprise, FinTech and Alternative Finance, Fintech International, Fundraising, Investing, Trading, Innovation and Resources, Research, Stories No comments

The Defiant | Samuel Haig | Apr 13, 2022

CBDC clearing house tests - Major US Clearing House DTCC Building 'Project Lithium' to Test CBDC Real-Time Settlement It takes a lot of complicated financial engineering to make it look like your stock market trades settle instantly. But in reality, it takes a vast shadow network of clearinghouses several days to shift your money around the market.

A new central bank digital currency (CBDC) prototype from the U.S. Depository Trust & Clearing Corporation wants to speed things up.

Read: Crypto Payments Report 2022: How digital currencies are revolutionizing commerce, corporates and culture

On Apr. 12, the DTCC announced that it’s building ‘Project Lithium’, a CBDC prototype that it’s using to explore whether a Federal Reserve-issued digital currency could clear a trade as soon as a brokerage sends the money.

The DTCC is very important; it processed $2.37 quadrillion worth of securities in 2021. Greasing its wheels could increase the efficiency of the financial markets by freeing up liquidity that would otherwise be tied up for several days.

“Project Lithium represents the next major step in our exploration of DLT, tokenization, and other emerging technologies,” said Jennifer Peve, who heads strategy and business development at the DTCC. “[It] will lay the groundwork for the financial community to better evaluate the implications of a CBDC across the trade lifecycle.”

China Ahead

China is further along in this race. Beijing first trialed a digital yuan in December 2019 and launched pilots in Shenzhen and Suzhou during the first half of 2020. Those pilots had expanded to more than 20 cities by the Winter Olympics in February.

See: Rich Turrin on EUs digital euro vision, U.S. eCash and China’s e-CNY + Shanghai Lockdown

Last month, Chinese officials estimated that the central bank had issued wallets to close to a fifth of China’s population – 261 million people – and that the network had processed nearly $14B billion.

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