U.S. Senate Is Now Floating the Idea of a "Digital Dollar"

Darnell Taylor
March 26, 2020

"Large Federal Reserve banks and other financial institutions (must) provide digital wallets to individuals and common taxpayers that are eligible for direct government emergency payments that are now being negotiated under the historic economic aid package".

The bill comes at a time legislators and regulators across the world are acting swiftly to counter the economic downturn.

Both Speaker Pelosis Take Responsibility for Workers and Families Act and the Financial Protections and Assistance for Americas Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321), introduced by Chairwoman Maxine Waters of Financial Services Committee, introduced these concepts today as a way of delivering the economic stimulus payments to US citizens. Ideally, U.S citizens who earn below $75,000 annually are likely to receive support till the economy recovers should the bill go through.

The text defined the term "digital dollar" as one of two things: 1) "a balance expressed as a dollar value consisting of digital general ledger entries" and 2) "an electronic value unit that can be redeemed by an approved financial institution".

"This stops short of the party proposing to create a cryptocurrency for this goal, and it is unclear whether it will make the final bill", said eToro market analyst Adam Vettese.

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When private labs conduct the testing, they are notifying the patient and the county health department, he added. The health department said it could not provide any additional information because of federal privacy laws.

Proposed legislation meant to support the USA economy during the coronavirus pandemic seemingly includes a recommendation to create "digital dollar" that could help the country get through the shutdown of business over the coronavirus outbreak.

The House bill also tasked the U.S. Postal Service to assist unbanked individuals and/or those without proper ID to establish a digital dollar account and set up ATMs for customers to access their funds. However, the Senate bill does not mention relief for the coronavirus outbreak.

Daniel Gorfine, founder of fintech advisory firm Gattaca Horizons and former chief innovation officer at CFTC, as well as a founding director of the Digital Dollar Project, told Forbes that CBDC is worth "exploring, testing, and piloting". These banks would be reimbursed "each calendar quarter" for "actual and reasonable operation costs incurred" offering these wallets to Americans.

However, the coin may share some wallet technologies with decentralized cryptocurrencies, and would probably bring blockchain awareness further into the American mainstream.

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