A sandbox test of a retail full-reserve digital currency (FRDC) has been completed in the United Kingdom, distributed ledger fintech company Millicent Labs announced on Thursday. The test was a demonstration for Innovate UK, a branch of the government’s U.K. Research and Innovation, which co-funded the company.
An FRDC is a privately issued digital currency pegged to a fiat currency, Millicent said in a statement. It is introducing a suite of FRDCs that are fully collateralized by cash deposits in a central bank account safeguarded by a regulated third party.
The demonstration for Innovate UK was intended to highlight the FRDC’s ability to bridge blockchain and traditional technology. It simulated fiat on-ramping from a large U.K. consumer bank, on-chain conversion and minting of FRDC tokens pegged to the British pound sterling, and use case scenarios including micropayments, use of a QR code and peer-to-peer payments. Payments were made by mobile app, custodial wallet and non-custodial wallet.
Millicent CEO Stella Dyer said, “We are extremely proud to have presented this world-first solution to Innovate UK — especially during such a turbulent time for the crypto markets.”
Millicent noted on its website that its currency is synthetic central bank digital currency (sCBDC), a form of CBDC that overcomes the tendency of CBDCs to be “overly-focused on domestic policy—a strategy that risks simply replacing today’s siloed, closed-loop financial systems with new ‘digital islands.’”…