Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Uptick In 'Digital Dollar' Effort Is Encouraging, But How Realistic Is It?

By Investing.com (Tanzeel Akhtar/Investing.com)CryptocurrencyApr 22, 2020 03:41AM ET
www.investing.com/analysis/digital-dollar-200522077
Uptick In 'Digital Dollar' Effort Is Encouraging, But How Realistic Is It?
By Investing.com (Tanzeel Akhtar/Investing.com)   |  Apr 22, 2020 03:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

In tandem with the COVID-19 global pandemic there's been a recent, significant uptick in discussion about the launch of a 'digital dollar.' To be fair, given the far more accute priorities currently pressing national goverments and a significant portion of the scientific community, it's likely the idea won't become a reality anytime soon.

Still, there have been some new, additional moves toward adapting the way the global reserve currency might be transferred to U.S. taxpayers and other constituents.

In March, U.S. Senator Sherrod Brown (D-OH) introduced a bill called the 'Banking For All Act' that has been referred to the Senate's Committee on Banking, Housing and Urban Affairs. It would require member banks, meaning national or state banks, or bank or trust companies that are members of one of the Federal Reserve banks, to maintain digital wallets, held by the Fed, for interested individuals and organizations that would be used to directly receive government payments. This would allow consumers to set up "FedAccounts" at their local banks.

In the current severely stressed economic environment, that could ensure safe and rapid payments to individuals in dire need from such government initiatives as the $2-billion rescue package enacted last month, as well as any future protection programs.

Digital Dollar Even More Useful?

So, wouldn't a digital dollar then be even more beneficial? Countries such as China and Sweden have already put in work to develop digital versions of their own fiat currencies. A group of individuals affiliated with the global, professional consultancy Accenture in partnership with the Digital Dollar Foundation, believe it would be equally useful in the U.S. They've launched a project aimed at developing what they're calling a U.S. Central Bank Digital Currency (CBDC), sometimes referred to as a 'digital dollar.'

In a recent CoinDesk post, one of the Foundation's stakeholders, former chairman of the U.S. Commodity Futures Trading Commission, Christopher Giancarlo said "proposals have been made for so-called 'digital dollar' electronic cash payment infrastructures to distribute electronic payments directly to consumers."

As the Foundation sees it, their initiative would be particularly valuable for government agencies charged with distributing crisis benefits to vulnerable populations, especially those without access to banking services. For example they say, direct transmission of digital dollars to smartphones would be a time-saver. Says Giancarlo:

“In a pandemic where viruses are transmitted by paper money and metal cash transactions, paying for food and essentials with digital dollars is more than convenient, it could be a lifesaver.”

No surprise, proponents of the crypto space see such a move as positive for the entire asset class. Ankit Bhatia, CEO Of Sapien Network believes this as is an exciting first step that could foster regulatory approval and adaption of cryptocurrencies.

“This could be huge for the wider crypto space because it's likely that merchants will develop payment methods that accept these ‘digital dollars’ and there's a strong possibility this development could reduce the need for physical cash and privately-run banks. With a ledger backing the digital dollar, counterfeiting becomes that much harder, so innocent people aren't punished for transacting with counterfeit cash.”

Others, however aren't convinced. Cyril Alvarez, head of blockchain at 2gether warns that, over the long term, digital dollars could have some repercussions for competitive, existing cryptocurrencies that are already pegged to the U.S. dollar.

“[This] could have a serious impact on other stable coins like Tether or DAI, since it would be a direct competitor, but backed by the U.S. Government. It could even lead to a ban of non-national stablecoins.”

The real question, notes Alvarez, is what will happen to national currencies in 10-20 years if decentralized stablecoins become more widely accepted and utilized? How can governments, for example, apply sanctions against a state or non-state actor without control of the private keys? In addition, what would a digitial version mean for USD's position as the world's reserve currency?

Though Alvarez doesn't have ready answers, he also doesn't believe a 'digital dollar' release is on the horizon:

“There are so many complicated questions still to answer that I see this as an unlikely move in the next five years.”

Uptick In 'Digital Dollar' Effort Is Encouraging, But How Realistic Is It?
 

Related Articles

Yuri Filatov
How Crypto Signals Help To Sell Digital By Yuri Filatov - Jul 26, 2021

In cryptocurrency trading, the speed of decision-making is essential. A well-thought-out strategy and sound tools will help you make the right deals quickly. Crypto signals are one...

Uptick In 'Digital Dollar' Effort Is Encouraging, But How Realistic Is It?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (14)
محمد فراری شاه بخشی
محمد فراری شاه بخشی May 03, 2020 11:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hello dear, how cleverly you explained and it was very clear and useful for me.Thank you my dear friend.You are really lovable
محمد فراری شاه بخشی
محمد فراری شاه بخشی May 03, 2020 11:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
good
محمد فراری شاه بخشی
محمد فراری شاه بخشی May 03, 2020 11:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Yel Bes
Yel Bes Apr 22, 2020 4:01PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
New World Order coming, sheeple society where the government controls everything
Rodney Baxter
Rodney Baxter Apr 22, 2020 10:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Its coming and alot quicker than 5 years. Dont let them lie to you.
CA AA
CA88 Apr 22, 2020 10:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Who is going to take care of the private key and supply, The US government? Then it's nothing more than the current Dollar in an app. A "real" Decentralised US dollar-backed by the US will probably never happen, in 5 years or even 10. I think this is the point in the 5 years comment!
Sum Toast
Sum Toast Apr 22, 2020 10:06AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hey, guys. I have a money that has been used by humanity globally for 5,000 years: GOLD & SILVER
Sum Toast
Sum Toast Apr 22, 2020 10:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Listen,everyone, this has been (((their))) plan for a while now. "Give me control of a nation's money supply and I care not what laws its makes." Money is power. They could care less about the little man. They've taken our land, values and morality from us. Now they want to chain us to an authoritarian digital currency. No more central bankers. No more fraudulent reserve. Their lies are unraveling. LEAVE US ALONE.
Luc Solberg
Luc Solberg Apr 22, 2020 10:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Id rather buy bitcoin than a fed tracked digital dollar
Apr 22, 2020 10:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
NOPE!
Gamer Turtle
GamerTurtle Apr 22, 2020 10:01AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
aren't we already sort of in a digital dollar world where most people have an online banking account?
Din Joekhannaz
Din Joekhannaz Apr 22, 2020 9:26AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hell no,.. do you how severe damage that Feds has done?! They rob in the plain daylight and now american wanna give them the cashless power? wake up please...
Ridley Dawson
Ridley Dawson Apr 22, 2020 9:26AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They’re tiring of printing money paper
ge vi
ge vi Apr 22, 2020 5:39AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How sick do you have to be to think something that allows for government to have more control, and take away freedom, privacy and be able to control individuals more is a good thing.
Ra Su
Ra Su Apr 22, 2020 4:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
people are going to abandon USD due to stupidity of current government
steven gitt
steven gitt Apr 22, 2020 4:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
yes i am sure everybody will be on board with a currency that can easily be tracked and seized by the government at their whim
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email