U.S. Congress Can Possibly Use Digital Dollar As The Coronavirus Stimulus Aid To Unbanked
The Coronavirus pandemic has taken the global economy on a toss. Over the last week, global markets have collapsed severely wiping out all gains of the last four years.
On Monday, the Federal Reserve took several economy correcting measures to prevent the ailing economy from falling further. Besides, the Fed has also announced some direct money transfer schemes for individuals and businesses affected due to the COVID-19 lockdown.
However, there are many U.S. citizens who are affected largely by the COVID-19 outbreak but are out of the realms of the traditional financial system or don’t hold a banking account. To help them, the Democrats in the United States House of Representatives have proposed the implementation of the Digital Dollar.
A draft for this legislation was circulated on Monday, March 23, which proposed that the creation of digital wallets for the U.S. citizens needs to maintained by the Fed as part of the “Direct Stimulus Payments for Families.”
This section aims at offering $2000 aid to all the individuals earning below $75,000 per year. Besides, these payments shall last until the economy recovers. The proposal also mentions that all the member banks of the Federal Reserve shall maintain the Digital Dollar wallets for all its clients.
The talks about having a Digital Dollar in the U.S. economy started almost six months back. Back then, lawmakers were possibly evaluating the option of U.S. Digital Dollar in order to keep the USD as the dominant currency in the global economy.
With China accelerating its development of the Digital Yuan, the U.S. is cautiously working on a similar alternative to keep its position as the strongest economy in the world. Rob Kaplan, the President of the Federal Reserve Bank of Dallas, said:
“People around the world are working real hard to try to find alternatives to dollars and dollar infrastructure because the more they’re invested in that, the more susceptible they are to sanctions, tariffs and what’s going on right now.”
Laster in November 2019, the Federal Reserve Jerome Powell also stated that they are weighing the option to having a central bank digital currency (CBDC). However, since then, there has been no concrete move on the Digital dollar part.
Currently, the Fed is entirely focused on getting the derailed economy back on track.