The Overton Window Opens for a Digital Dollar

Legislation introduced to the U.S. Congress this week signals that the Overton Window – a metric of what’s politically feasible – is opening in favor of national digital currencies. 

While it’s unlikely we’ll see a digital dollar any time soon, the coronavirus crisis may help precipitate adoption of novel forms of money, members of the cryptocurrency industry and other observers say. 

The legislation comes about as U.S. officials look for ways to get much-needed cash into American pockets. According to a Senate bill, using a central bank digital currency (CBDC*), the federal government could send direct payments to citizen’s wallets held by the Federal Reserve, called FedWallets.

While the proposed bills lack detail, and at least one has been scrubbed of reference to this new payment mechanism, many in the crypto community see this as validation of both as an asset class and a set of ideas about the future of the financial system.  

See also: Why the U.S.’ $2 Trillion Stimulus, Unlimited QE Will Expose the Monetary System’s Flaws

“[T]his is not the last we’ll see of the digital dollar movement,” Lawson Baker, founder of Relayzero, a cryptocurrency investment and advisory firm, said in direct message. 

The dollar is the United States’ greatest export, and any technologist or financier would want to be a part of its next phase of existence, Baker said. “Favors. Pork. You name it. Everyone wants in to the digitization of the dollar payday.”

Whether introduced out of sheer desperation, as a genuine attempt to utilize instantaneous and transparent payment technologies, or as “bill padding,” as Mati Greenspan, a digital asset researcher wrote, CBDCs are rising up the mainstream agenda. In a few short days, CBDCs have gone from being fringe to getting support from senators like Sherrod Brown (D-Ohio), who has proposed digitizing the existing currency and keeping accounts for the public at the Fed. 

Catherine Coley at Invest: NYC 2019 via CoinDesk archives
Catherine Coley is a proponent of the…

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