Coronavirus Stimulus Offered By House Financial Services Committee Creates New Digital Dollar
Updated on 3/24/20 at 11:45 AM: The final form of the economic stimulus package provided by Speaker Pelosi the House Democrats no more includes the U.S. Digital Dollar proposal; however, the language as proposed by Chairwoman Waters associated with the House Financial Services Committee still contains this language. Links to your original and updated stimulus bills utilizing the language that is latest have reached the conclusion of this story.
As the markets continue steadily to drop as well as the U.S. looks to Congress for agreement for a massive stimulus package to save lots of the economy from impacts of this coronavirus pandemic, the most recent offer by House Democrats features a very forward-looking form of stimulus: the creation of the ‘digital dollar’ as well as the establishment of ‘digital dollar wallets.’ This signals the U.S. is serious in establishing infrastructure for a central bank digital currency in what will send shock waves through the cryptocurrency and blockchain industry, particularly for those following central bank digital currencies around the world.
Both Speaker Pelosi’s ‘Take Responsibility for Workers and Families Act’ as well as the ‘Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321),’ introduced by Chairwoman Maxine Waters of Financial Services Committee, introduced these concepts today as a means of delivering the stimulus that is economic to U.S. citizens.
U.S. House Speaker Nancy Pelosi, a Democrat from California, speaks outside of her office on Capitol … [+]
The bill establishes a dollar that is digital which it defines as ‘a balance expressed being a dollar value composed of digital ledger entries which are recorded as liabilities within the accounts of any Federal Reserve Bank or … a digital unit of value, redeemable by the eligible standard bank (as based on the Board of Governors of this Federal Reserve System).’ Additionally, a digital dollar wallet is defined as ‘a digital wallet or account, maintained by way of a Federal reserve bank with respect to any person, that represents holdings in a digital camera or service which is used to store digital dollars which may be associated with an electronic or physical identity.’
A mandate also requires all ‘member banks’ set up a ‘pass-through digital dollar wallet’ to any or all customers qualified to receive the stimulus. Member banks include those banks which are ‘members’ of this Federal Reserve and regulated by the Fed. Additionally, ‘Non-Member’ state banks – the ones that not members of this Federal Reserve and regulated by the FDIC – could opt-in to supply pass-through dollar that is digital as well.
The Federal Reserve banks themselves would also make available a dollar that is digital to any U.S. person eligible for the payments as well. Additionally, the U.S. Postal Service would aim to help unbanked individuals and/or those without proper ID to establish their identity be provided a dollar that is digital, and would put up ATMs for customers to gain access to their funds.
Public Interest Groups Weigh In
Daniel Gorfine, founder of fintech firm that is advisory Horizons and former chief innovation officer at CFTC, as well as a founding director of the Digital Dollar Project, stated to Forbes, ‘It is worth exploring, testing, and piloting a true USD CBDC and broader digital infrastructure in order to improve our future capabilities and resiliency, but it is also important that this effort not delay the government from deploying critical emergency funds using existing channels during this crisis. While the crisis underscores the importance of upgrading our financial infrastructure, broadly implementing a CBDC will require time and coordination that is thoughtful the us government and private sector stakeholders.’
Carmelle Cadet, Founder and CEO of EMTECH, a contemporary bank that is central and services company, is a technology provider in the world’s first live retail CBDC with the Central Bank of Bahamas called the Sand Dollar. She has recently started a initiative that is new the U.S. called ‘Project New Dawn’ to guarantee the unbanked and underbanked receive economic stimulus payments. Pointing to a FDIC report in 2017 that identified 63 million people who are underbanked and unbanked within the U.S., she notes, ‘If checks would be the as a type of payment, the stimulus will not reach most of them. That could be approximately $100B underutilized of stimulus for low income householders.’
Financial Services Committee Proposal: Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321)
Original Bill With Digital Dollar: Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321)
Updated ‘Final Bill’ As Recorded within the House of Representatives: Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321)