Digital US dollar should enable government payments
Representatives of the US House of Representatives want to support citizens with direct government payments. A “digital US dollar” should help with this. Corresponding legislative proposals by the democratic party bring them into play. To what extent blockchain technology could be used is currently unclear. It is also questionable whether the project will be approved by both chambers of parliament.
Whether in the home office, while shopping or looking at your own account — the coronavirus does not only affect our healthcare and social life. Above all, the economy and not infrequently one’s own wallet groan under the consequences of the pandemic. That is why extensive aid packages and support measures are being put together worldwide to help companies and private individuals.
In the United States, a “digital US dollar” is now to help combat the economic downturn to curb the impending recession. At least, that’s how two bills provide for it. These were brought in by Democratic MPs from the US House of Representatives and published last weekend. This is what the Forbes US economic news reports this Monday, March 23.
Both legislative proposals, one written by the chair of the House of Representatives Nancy Pelosi and the other by the chair of the Finance Committee Maxine Waters, support such a central bank currency as a digital payment alternative during the ongoing crisis.
The drafts now under discussion say that the US Federal Reserve could launch a “digital US dollar” to support the economy. This is intended to provide citizens with one-time payments of $ 1,000 to $ 2,000.
As such, the preliminary legal texts define “a US dollar value that is recorded as a digital database entry as a liability in the books of every US Federal Reserve”. In addition, it is an “electronic unit of value that can be redeemed at approved financial institutions”. For this purpose, the Fed should set up appropriate wallets on which US citizens receive their payments.
None of the drafts does say that the “digital US dollar” is a cryptocurrency or that a decentralized infrastructure is used for the wallets. Nevertheless, Bitcoin & Co. and the digital central bank currencies that have been discussed around the world may have provided plenty of inspiration for the proposal .
With well-known advocates such as the former head of securities supervision CTFC J. Christopher Giancarlo or economist Judy Shelton, the intended introduction of such a “digital US dollar” could hope for prominent supporters.
However, it is currently not clear whether this will remain in the final legal text and whether the drafts will actually be adopted. At the moment, the republican party’s intra-party trench warfare paralyzes the adoption of further aid packages. A Republican bill, for example, which in turn provides for state payments to US citizens, is currently facing considerable opposition within the party.