New
Coronavirus Legislation Eyes ‘Digital Dollar’ to Ease Recession
Proposed legislation meant to
support the U.S. economy during the coronavirus pandemic includes a
recommendation to create a digital dollar that could help people survive the
shutdown of businesses and “shelter-in-place” orders that have seen
unemployment grow.
According to the draft bills
shared, dubbed the “Take Responsibility for
Workers and Families Act” and the “Financial Protections and
Assistance for America’s Consumers, States, Businesses, and Vulnerable
Populations Act,” the country’s central bank, the Federal
Reserve, could use a “digital dollar” to send payments to “qualified
individuals.” These payments would be of $1,000 for minors and $2,000 for
adults, and would be sent to digital wallets.
The bills read:
“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).”
The Federal Reserve would
maintain the digital wallets for recipients. Member banks could maintain a
“pass-through digital dollar wallet.” Neither bill mentions the use of
decentralized blockchain technology, or any cryptocurrency project.
The proposed legislation comes
as all major U.S. stock market indexes dropped over 30% from their all-time
highs over the coronavirus pandemic. The Dow Jones Industrial Average is,
according to The Street, on track to see its worst month since 1931.
