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US Senate Financial Services Committee includes digital dollar in its coronavirus stimulus bill

Wed, 25 Mar 2020, 14:08 pm UTC

The U.S. Democratic Party included the creation of a digital dollar in its draft for a massive coronavirus-induced stimulus bill.

The bill defines the digital dollar as 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.”

Additionally, it also defined a digital dollar wallet as a “digital wallet or account, maintained by Federal reserve bank on behalf of any person, that represents holdings in an electronic device or service that is used to store digital dollars that may tied to a digital or physical identity.”

Billy Bambrough of Forbes noted that the proposal to create a digital dollar is a “tacit endorsement” of cryptocurrencies and bitcoins. However, it is still not guaranteed that the digital dollar will make it into the final bill.

“This stops short of the party proposing to create a cryptocurrency for this purpose, and it is unclear whether it will make the final bill,” said eToro market analyst Adam Vettese.

The calls for the United States to create a digital dollar have been growing louder in the past months especially when Federal Reserve chairman Jerome Powell said that he was looking into the possibilities of a central bank digital currency (CBDC).

Daniel Gorfine, founder of fintech advisory firm Gattaca Horizons and former chief innovation officer at CFTC, as well as a founding director of the Digital Dollar Project, told Forbes that CBDC is worth “exploring, testing, and piloting.”

Gorfine added that USD CBDC and broader digital infrastructure can help improve the country’s future capabilities and resiliency.

Meanwhile, Binance.US CEO Catherine Coley urged the government to use stablecoins for emergency funds. According to her, it is safe and fast because it can be distributed digitally.

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