Here comes the Digital Dollar !

Discussion in 'Cryptocurrencies' started by Sprout, Mar 24, 2020.

  1. Sprout


    Bullish or Bearish for Bitcoin?

    "As the markets continue to drop and the U.S. looks to Congress for agreement on a massive stimulus package to save the economy from impacts of the coronavirus pandemic, the newest offer by House Democrats includes a very forward-looking kind of stimulus: the creation of a ‘digital dollar’ and the establishment of ‘digital dollar wallets.’ In what will send shock waves through the cryptocurrency and blockchain industry, particularly for those following central bank digital currencies around the world, this signals the U.S. is serious in establishing infrastructure for a central bank digital currency.

    Both Speaker Pelosi’s ‘Take Responsibility for Workers and Families Act’ and the ‘Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act (H.R. 6321),’ introduced by Chairwoman Maxine Waters of Financial Services Committee, introduced these concepts today as a way of delivering the economic stimulus payments to U.S. citizens.

    The bill establishes a digital dollar, which it defines 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 (as determined by the Board of Governors of the Federal Reserve System).’ Additionally, a digital dollar wallet is identified as ‘a digital wallet or account, maintained by a 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 be tied to a digital or physical identity.’

    Today In: Crypto & Blockchain
    A mandate also requires all ‘member banks’ establish a ‘pass-through digital dollar wallet’ to all customers eligible for the stimulus. Member banks include those banks that are ‘members’ of the Federal Reserve and regulated by the Fed. Additionally, ‘Non-Member’ state banks - those that not members of the Federal Reserve and regulated by the FDIC - could opt-in to offer pass-through digital dollar wallets as well.

    The Federal Reserve banks themselves would also make available a digital dollar wallet to any U.S. person eligible for the payments as well. Additionally, the U.S. Postal Service would aim to help unbanked individuals and/or those without proper ID to establish their identity be provided a digital dollar account, and would set up ATMs for customers to access their funds.

    Public Interest Groups Weigh In

    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, stated to Forbes, ‘It is worth exploring, testing, and piloting a true USD CBDC and broader digital infrastructure in order to improve our future capabilities and resiliency, but it is also important that this effort not delay the government from deploying critical emergency funds using existing channels during this crisis. While the crisis underscores the importance of upgrading our financial infrastructure, broadly implementing a CBDC will require time and thoughtful coordination between the government and private sector stakeholders.’

    Carmelle Cadet, Founder and CEO of EMTECH, a modern central bank technology and services company, is a technology provider in the world’s first live retail CBDC with the Central Bank of Bahamas called the Sand Dollar. She has recently started a new initiative in the U.S. called ‘Project New Dawn’ to ensure the unbanked and underbanked receive economic stimulus payments. Pointing to a FDIC report in 2017 that identified 63 million people that are unbanked and underbanked in the U.S., she notes, ‘If checks are the form of payment, the stimulus is not going to reach many of them. That would be approximately $100B underutilized of stimulus for lower income householders.’ "
    Onra likes this.
  2. gaussian


    So it begins.

    This will destroy paper money. What a clever way to say "hey we want to track every purchase anyone ever makes - lets demo it in the crisis". People can cash checks for an ultra small fee at the local grocer. Banks are still drive up and will cash checks for a very small fee. This problem is solved. This is the authoritarian technocracy doing what it does best again.
    Onra likes this.
  3. Banjo


    You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before.

    Rahm Emanuel
    qlai and Edmond like this.
  4. "for a central bank digital currency." means average Joe has no access to it. Banks and FI only.
  5. xandman


    The dollar went digital the moment we went off the gold standard. Very soon after, the amount of currency existing as an entry in ledgers exceeded the amount in circulation.
    Pekelo and Nobert like this.
  6. Sprout


    China is way ahead of us on mobile payments:

  7. tiddlywinks


    Digital dollar as proposed by US government is not about efficient consumer transactions. It is all about tracking income, assets, and taxation.

    Bearish. If/when government approves digital dollar as a legal medium of exchange, Bitcoin becomes useless. Perhaps some sort of barter medium between 2 parties, but conversion into digital dollars may be limited so such a conversion is nothing more than a collectible value, for token collectors. With cost basis known and immutable thanks to blockchain tech, the asset is on the grid and taxable like other sources of income and/or asset.
    Banjo likes this.
  8. Sprout


    I hear you but my opinion is that it will be long-term bullish simply because BTC is decentralized, permissionless, censorship-resistant, supply is capped at 21 million, open-source, soon to be 'harder' than gold, and has cut it's teeth in an adversarial environment since it's inception. The payment layer is being facilitated by Lightening Network and it is relatively pseudo-anonymous. The only headwind I see is if the US can strong-arm other countries to form a consensus block to outright outlaw it. This would be tested in court under the 1st amendment given it is software and an expression of free speech.
  9. This^

    Also need to think this will open up a lot of people's eyes to digital currency. There is still a big portion of the population that doesn't have a clue what digital currency is, and a lot of people don't like the way currency is ran by the government. To me this is very bullish for Bitcoin, and probably bullish for shit coins.
  10. patrickrooney

    patrickrooney Sponsor

    #10     Apr 28, 2020