Draft of Coronavirus Bill Suggests Issuance of the Digital Dollar in The US

As the markets continue to shift negatively, the US looks to Congress for agreement on a significant stimulus package to rescue the economy from impacts of the coronavirus pandemic. The Democrats in the US house want to create a ‘digital dollar’ and the establishment of ‘digital dollar wallets according to a proposed draft stimulus bill, which has been circulating ahead of formal publishing.

The digital wallets would be maintained by the Federal Reserve Bank. The new proposals will facilitate payments outside of the traditional financial system.

Moreover, a digital dollar wallet is seen as a wallet or account maintained by a Federal reserve bank on behalf of any person representing holdings in an electronic device or service used to store digital dollars that could be linked to digital or physical identity.

The Digital Dollar Can Help Workers and Families

 “Direct Stimulus Payments for Families” is a bill entitled, which envisions $2,000 monthly payments to every adult with a salary of less than $75,000 per year. According to the proposal, the remission would continue until the economy recovers. . The proposal would require the Federal Reserve member banks to make digital dollar wallets available to all US citizens.

The bill establishes a digital USD, which is defined as ‘a balance expressed as a dollar value comprising digital ledger entries recorded as liabilities in any Federal Reserve Bank accounts. It is also an electronic unit of weight, which can be rescued by an eligible financial institution.

Further, the US Postal Service would strive to ensure the unbanked individuals and those without proper identification establish their identity by providing a digital dollar account and setting up ATMs to access their funds.

Automatic Boost to Communities Act

The draft bill could incorporate elements of a proposal from Michigan Congresswoman Rashida Tlaib, established as the Automatic BOOST to Communities Act. The proposal calls for the formation of a permanent Treasury administered digital public currency wallet system. 

The proposal pointed that all ‘member banks’ establish a ‘pass-through digital dollar wallet’ to all customers eligible for the stimulus. These include banks that are ‘members’ of the Federal Reserve and regulated by the Fed. Additionally, ‘Non-Member’ state banks – those that are not members of the Federal Reserve and regulated by the FDIC – could opt-in to offer pass-through digital dollar wallets too.

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According to the proposal, member banks with over $10 billion total consolidated assets shall promptly offer individuals the ability to apply for the pass-through digital wallets. The citizens can do so through online or telephonic means.

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