The Digital Dollar Project is the brainchild of former CFTC chair Chris Giancarlo, ex-CFTC chief innovation officer Daniel Gorfine and Pure Storage CEO Charles Giancarlo, who have set up a not-for-profit to encourage research and public discussion about a CBDC.

The sandbox programme will begin in October, with an inaugural cohort of participants focused on cross-border payments. Further cohorts will follow, each of which will carry out an education phase followed by a pilot phase.

The project is designed to provide the federal government, policymakers, and private sector organisations with a stronger, clearer picture of what implementing a CBDC in the US would look like, and to answer questions of what a roll-out might entail across retail, wholesale, and international use cases.

Jennifer Lassiter, executive director, Digital Dollar Project, says: "The Digital Dollar Project is excited to bring a broad array of industries and technical experts together to define desired outcomes and explore a wide range of technical design choices in relation to a US CBDC."

In January, the Federal Reserve published its long-anticipated discussion paper on the risks and benefits of a digital dollar and invited public comment - but studiously avoided giving any hints on its plans.

Fed chair Jerome Powell has remained noncommittal on the chances of a digital dollar, but others at the central bank have been less circumspect.

Supervision chief Randal Quarles has suggested that CBDCs could be an embarrassing fad, comparable to the parachute pants made famous in the 1980s by rapper MC Hammer. Governor Christopher Waller declared himself "highly sceptical" that there is a compelling need for a digital dollar.