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‘Digital dollar’ proposals scrubbed from Covid-19 relief bill

By Lawrence Gash

Democrats drop proposals in emergency legislation

Digital dollar proposals scrubbed from Covid-19 relief bill

References to a “digital dollar” have disappeared in the latest draft of the coronavirus relief bill currently making its way through the US congress.

Both the Take Responsibility for Workers and Families Act and the Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act included proposals for the creation of digital wallets. Through these, the Federal Reserve could send “digital dollar” payments to “qualified individuals”.

The bills added: “The term ‘digital dollar’ shall mean 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).”

However, as the Covid-19 relief stimulus bill continues a fairly arduous journey through the American legislature, these proposals have been left by the wayside.

The inclusion of such proposals underlines the growing institutional interest in blockchain technology, first popularised by Bitcoin (BTC).

In recent years central banks around the world have stepped up research and development into digital currencies, with Japan, Britain, Canada, Switzerland, Sweden and the eurozone all sharing their findings.

Some fear that the technology, which enabled individuals to safeguard themselves from the whims of central bankers and the fiat system, through cryptocurrencies, will eventually be used by these institutions and result in a further loss of liberty.

China has already allocated significant resources to the digitisation of the yuan, while a leaked talk to the governor and board of the Bank of Canada outlined the potential to track citizen spending and sure up tax collection through a digital Canadian dollar (CAD).

In light of its controversial nature and early developmental stage, it is perhaps unsurprising that proposals for a “digital dollar” were dropped from these emergency bills.

FURTHER READING: Dollar falls as US stocks rebound from three-year lows

FURTHER READING: Latest PMI data points to major European recession

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