The highly anticipated coronavirus stimulus package has Congressional Democrats looking towards the future–in more ways than one. On Monday and Tuesday, three bills presented by Democrats in the House and the Senate proposed using digital currency to deliver financial relief to Americans reeling from the economic effects of the ongoing pandemic.
The draft of House Speaker Pelosi’s “Take Responsibility for Workers and Families Act,” revealed late Monday, floated the idea of creating a “digital dollar,” which it described as “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 draft also proposed requiring Federal Reserve member banks to establish digital wallets for distributing economic stimulus payments to qualifying individuals, with non-member banks also being offered the option to participate.
Yet, the final version of the House Democrats’ stimulus bill does not mention the digital dollar, and is far less specific about how relief payments would be distributed. The “Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321),” the Financial Services Committee’s contribution to the stimulus package, does still include language regarding a digital payment system; however, that is likely to change in the face of skepticism regarding sweeping changes in a time of national crisis. On the other hand, digital currency could be a lifeline for the millions of Americans who are “unbanked” and best served by a distribution system that does not rely on checks. You can read the most updated version of each bill by clicking here.
Today, Ohio’s Sherrod Brown, ranking member of the U.S. Senate Committee on Banking, Housing and Urban Affairs, introduced a new bill that uses the term “digital dollar,” defining it as “dollar balances consisting of digital ledger entries recorded as liabilities in the accounts of any Federal Reserve bank.” Brown’s bill also charges the Federal Reserve with administering and sustaining the digital dollar, proposing the creation of digital wallets called “FedAccounts.”
Whether the digital dollar is included in the final coronavirus stimulus package or not, this development is likely to be of great interest to cryptocurrency and blockchain professionals, as it suggests that the United States is moving towards establishing central bank digital currency.