Discussions regarding digital currencies and their role in the modern world started a long time ago. Central banks in several states in Europe and other parts of the globe are willing to learn more about this emerging technology. However, recently U.S. Congress members went one step further as they would like to introduce a digital dollar. This way they want to support the U.S. economy.
It is not a secret that cryptocurrencies are struggling to gain recognition from lawmakers as well as regulators. For example, in 2019 Facebook’s CEO Mark Zuckerberg had to defend the digital currency project Libra.
Nevertheless, this time they want to use digital currency as a part of the stimulus package. Interestingly, House Democrats presented a very-forward looking stimulus package. According to their proposal, the U.S. should create a digital dollar.
House Speaker Nancy Pelosi, introduced a document called “Take Responsibility for Workers and Families Act”. Furthermore, another document also supports this idea.
Chairwoman Maxime Waters of the Financial Services Committee presented the “ Financial Protections and Assistance for America’s Consumers, State, Businesses and Vulnerable Populations Act”.
The purpose of a digital dollar is to deliver economic stimulus payments to U.S. citizens.
Digital dollar and stimulus package
The coronavirus outbreak affected the U.S. economy. In this situation, it is essential to take measures to avert serious consequences. Cryptocurrencies and a digital dollar, in particular, may soften the impact of the outbreak.
Based on this bill, a digital dollar is a balance expressed as a dollar value consisting of digital ledger entries. Those ledgers are recorded as liabilities in the accounts of the Federal Reserve Bank or an electronic unit of value, redeemable by an eligible financial institution.
The Board of Directors of the Federal Reserve System has the authority to determine which financial institutions fall under this category.
House Democrats and their approach are quite interesting and U.S. Congress should pay attention to such projects.