- The US is considering the digital dollar as part of the stimulus bill in hope to come to grips with the economic crisis amid the coronavirus pandemic.
The economic fallout from the coronavirus pandemic is sure to result in prolonged challenges. Amid the crisis, the US Congress is deliberating a stimulus bill that will digitize the dollar, hoping to tackle the challenges.
As per reports, the draft bill is sponsored by Speaker of the House of Representatives, Nancy Pelosi and will require the Federal Reserve System to maintain the digital wallets and accounts. The section dubbed as “Direct Stimulus Payments for Families” proposes a monthly stipend of USD 2,000 for the citizens with an annual income of less than USD 75,000.
As per the bill, the digital dollar should be interpreted as ‘a balance expressed as a dollar value consisting of digital ledger entries that are recorded as liabilities in the accounts of any Federal Reserve Bank or … an electronic unit of value, redeemable by an eligible financial institution (as determined by the Board of Governors of the Federal Reserve System).’ The digital wallet is defined as ‘a digital wallet or account, maintained by a Federal reserve bank on behalf of any person, that represents holdings in an electronic device or service that is used to store digital dollars that may be tied to a digital or physical identity.’
Daniel Gorfine, founding director of the digital dollar project, stated:
“It is worth exploring, testing, and piloting a true USD CBDC and broader digital infrastructure in order to improvise our future capabilities and resiliency, But it is also important that this effort does not delay the Government from deploying critical emergency funds using existing channels during this crisis. While the crisis highlights the importance of upgrading our financial infrastructure, broadly implementing a CBDC will require time and thoughtful coordination between the Government And private sector stakeholders.”
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