This paper presents the design and implementation of a very fast pilot protection scheme for the FREEDM* system, which is the next generation distribution system. This system is subjected to a line fault. The designed pilot protection system makes time-synchronized measurements. The measurements are converted to digital format, time stamped and transmitted to the computer. The computer compares these measurements and sends a trip signal to the electronic circuit breaker based on the location of the fault. The comparison is done utilizing a protection algorithm for the pilot protection scheme and the over current protection scheme. Since the whole system is based on digital signal, it is much faster compared to the conventional protection system. The hardware implementation of the system and simulation of the protection algorithm is discussed in detail.