United States digital dollar on the way? On Tuesday, June 30, 2020, the U.S Senate’s Banking Committee hosted a meeting in which they discussed the future of bitcoin, cryptocurrency, and blockchain technology. However, a digital currency to replace or compliment the United States dollar was the main focus.
The emergency meeting was a result of U.S. government officials realizing China’s aggressive push into digital currency. The National Congress of the Communist Party, in coordination with People’s Bank of China (PBOC) recently announced the testing of a national digital currency, dubbed DCEP. China-based popular applications (Apps) such as WeChat, TikTok, AliPay will pre-install DCEP.
China’s new digital currency creates concerns
As a result, the U.S. government is concern a successful and widely circulating digital Yuan will further push China‘s ambitions to greater heights. They believe such addition could favor China with international trading partners and emerging markets.
The United States’ government has no one else to blame, other than itself. They completely dismissed Bitcoin and cryptocurrency. Meanwhile, the Asian continent continue to create technologies to dominates the digital currency market.
Facebook’s Libra project started to warm up the idea of digital currency backed by the United States dollar back in July 9, 2019. Congress dragged in FB’s CEO, Mark Zuckerberg for several hours of grillings. However, instead of trying to understand Zuckerberg’s project, they spent hours playing politics with the tech guru.
However, despite China’s intention, a United States digital dollar movement began taking shape only after the Corona virus pandemic or COVID-19 started to ravage the U.S economy.
Is a United States digital dollar imminent?
The idea gain momentum after the U.S. Department of the Treasury finds it extremely difficult to distribute stimulus checks of $1,200. Which supposed to go to each of its citizens and legal residents. It was only then they grasp that an official United States digital dollar could be a more “efficient financial distribution machine.”
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), passed by the Senate in March 25, 2020, signed into law by President Donald J. Trump in March 27. The IRS didn’t make a single deposit to the accounts of those who needed it until April 11. The first batch of paper checks were not mailed out until the beginning of May.
There are also the business-oriented stimulus packages such as the Payroll Payment Protection (PPP), the Economic Injury Disaster Loan (EIDL) and others we’re not going to cover. All these measures created a distribution and logistical nightmare, for both the government and those needing assistance.
Can congress mandate a digital currency?
On April 22, two radical female members of House of Representatives; Rashida Tlaib (D-Michigan) and Pramila Jayapal (D-Washington) drafted and introduced a new stimulus bill. Named Automatic BOOST to Communities Act (ABC Act), it proposed sending $2,000 USD to residents every month, until COVID-19 is contained and workers are back to work.
The most radical part of the proposal was the part that would require the Federal Reserve to send the fund via United States Digital Dollar. The bill asked the Fed to create a digital wallet for each eligible resident to deposit the money instantly. The proposal is still pending.
It is unknown if a United States digital dollar will come to pass. However, what is clear is countries like China and other competing to dominate the world’s currency are making the United States government nervous.