The US stock markets are affecting badly by COVID-19, and Fed is making appropriate measures to support the economy. The stimulus package proposed by the Fed in an attempt to prevent the US’s economy from collapsing. House Democrats propose a new idea of creating a ‘digital dollar’ for unbanked people as a part of the stimulus package.
Digital Wallets for ‘digital dollar’
On Monday, Bloomberg reported that Democrats of House of representatives are thinking about launching the digital version of the US dollar. To store these digital dollars, there will also be digital wallets provided by the Fed. The proposal was published by Maxine Waters, the Chairwoman of the House Financial Services Committee.
It is important to note here that the digital version of US native currency will entirely different from cryptocurrency. The payments will be real-time payments as suggested by the media outlet.
The Democrats ‘’want to use digital dollars and digital wallets to speed the disbursement of direct emergency funds to unbanked consumers as part of a COVID-19 economic stimulus plan.’’
‘’Reserve banks and other financial institutions to provide digital wallets to individuals and joint tax filers eligible for direct governmental emergency payments currently under negotiation in the historic economic relief package,’’ Bloomberg Law commented.
A crypto maximalist, Nathaniel Whittemore, hypothetically shared four step by step steps to launch the ‘digital dollar’. According to Whittemore:
‘’Step 1: Introduce digital dollar to ship stimulus payments.
Step 2: Hundreds of millions of Americans get their first digital wallet.
Step 3: Trillions of stimulus leads to..well..you know.
Step 4: Do you really need me to say it?’’
Different from Cryptocurrency
The central bank digital currency (CBDC) is not mentioned in the legal text shared by Waters. It seems that the digital dollar is different from both Bitcoin and a central bank’s CBDC.
China was the first country to announce the launch of state cryptocurrency under the scrutiny of the central bank. Due to Coronavirus, they have to delay the plan of launching a digital currency.
If the suggestive plan by House Democrats implements in the US, there will be a great influence on Bitcoin. The initiative will pave the pathway for cryptocurrency adoption worldwide.