24 Mar 2020 Morgan Hayze
Will The U.S. Dollar See Its Digital Representation Amid The Coronavirus Crisis?
The digital finance sector may see its first massive recognition as the Democrats in the House of Representatives considers proposing the idea of issuing a digital “dollar,” aimed at providing relief money to its citizen.
The idea comes amid the global Coronavirus pandemic, which caused stock markets to crash and make the crypto world endure through high price turbulence.
The Democrats are considering the new digital dollar to inherit some of the well-known traits of the crypto world – digital wallet creation for storing and transferring value, as well as a complete system to interact with the wallets. Maxine Waters, Chair at the House Financial Committee, drove publicity to the matter, describing it in text documents.
The core mechanism, however, would not rely on a decentralized ledger because the U.S. Treasury and the U.S. Federal bank would control the issuance and governance of the proposed “digital dollar.”
The two documents are aimed toward relieving workers and their families, who had problems due to the COVID-19 outbreak. The bills suggest each minor to receive $,1000. The stimulus for an adult was proposed to be $2,000. One of the key measures includes “unbanked” users to also participate in the stimulus evaluation. They would receive their fund via special ATMs in the post offices.
Peter Van Valkenburgh, Director of Research at CoinCenter, described the idea as “a digital ledger, represented in U.S. dollars,” and “a digital currency, backed and redeemable by financial institutions.”
Hill’s proposal is a part of his plans for money distribution to U.S. citizens amid the ongoing economic crisis. According to Hill, such a system would be much easier to maintain than a traditional fiat monetary system, especially in times of financial crisis.
“Such a system would enable Federal Reserve banks and other financial institutions to grant digital wallet services to U.S. citizens and further enhance taxation policies in times of crisis. This way, the U.S. government would have the perfect tool for emergency payments,” Hill added.
However, the exact mechanisms and the technology behind the proposal are still unclear. Crypto enthusiasts and experts quickly put the plans for creating a digital dollar into the “central bank digital currency” category. Some experts even predicted positive price movements for the crypto sector and Bitcoin, in particular.
Crypto analyst Nathaniel Whittemore predicted that such a decision would meet Americans with some form of a digital wallet technology, which could boost the adoption of cryptocurrencies. The other statement Whittemore made was that if the COVID-19 crisis continues to grow, the overall value of the U.S. Dollar could tumble down.
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