Proposed legislation meant to shore up the U.S. economy during the coronavirus pandemic includes a recommendation to create a digital dollar.
This virtual greenback would help individuals and families survive the shutdown of businesses and series of “shelter-in-place” orders which resulted in skyrocketing unemployment claims and a potential severe recession.
Under the draft bills shared last week, dubbed the “Take Responsibility for Workers and Families Act” and the “Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act,” the Federal Reserve – the nation’s central bank – could use a “digital dollar” and digital wallets to send payments to “qualified individuals,” consisting of $1,000 for minors and $2,000 to legal adults.
Both bills employ identical language around the digital dollar suggestion.
“The term ‘digital dollar’ shall mean 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 bills read.
The Fed would likewise be in charge of the digital wallets, maintaining them for recipients.
Neither bill indicates that the program would use a decentralized ledger or any sort of cryptocurrency project. However, digitizing the dollar in general is seen by many influential figures as a necessity for the U.S., with former Commodity Futures Trading Commission J. Christopher Giancarlo and economist Judy Shelton – who U.S. President Donald Trump has nominated to the Fed board – both claiming the nation may lose its financial hegemony if it fails to do so.
Fed member banks can also maintain something called a “pass-through digital dollar wallet,” according to the draft bills, and recipients would receive “a pro rata share of…