COVID-19: Congress Proposing Digital Dollar as Part of Stimulus Package

Andrew Cummings
March 26, 2020

Central bank digital currencies have been a hot topic among central banks since the introduction of the Facebook-led digital currency project Libra last summer, which "really lit a fire" under the development of a digital dollar, Fed Chair Jerome Powell said February 20 in a House Financial Services Committee meeting.

In particular, the incentive could be without a digital system, but a digital system that is accessible to anyone with internet access would likely increase the effectiveness of the measures, thereby increasing the amount of money that is created and injected into the economy.

In at least one version of House Speaker Nancy Pelosi's bill, she proposes a digital dollar. However, it's unclear at this time if the Senate bill includes that provision. The digital dollar will consist "of digital ledger entries recorded as liabilities in the accounts of any Federal Reserve bank".

Financial Services Committee Chair Maxine Waters has proposed the 'Financial Protections and Assistance for America's Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321),' which would result in the Federal Reserve creating a digital currency, and the establishment of digital wallets for all customers who are eligible for federal stimulus funds and other support infrastructure.

Proposed legislation meant to support the USA economy during the coronavirus pandemic seemingly includes a recommendation to create "digital dollar" that could help the country get through the shutdown of business over the coronavirus outbreak.

It's worth noting the bills don't mention cryptocurrency projects, nor do they mention the use of a decentralized ledger. "That bill, the "Financial Protections and Assistance for America's Consumers, States, Businesses, and Vulnerable Populations Act, ' would empower the Federal Reserve - the central banking system in the US - to put money into Americans" hands quickly with a new Fed-backed digital dollar system".

Coley also stated that digital currencies also remove the need for people to go to the bank to cash a check thus aiding social distancing and self-quarantining efforts. If there isn't "sufficient information to make direct deposit payments" to the individual, they would be paid by check. That would be approximately $100B underutilized of stimulus for lower income householders.

Other reports by iNewsToday