U.S. Senate Is Now Floating the Idea of a “Digital Dollar”

U.S. Senate Is Now Floating the Idea of a “Digital Dollar”

House Democrats scrubbed any mention of a digital dollar from the coronavirus relief bill Tuesday morning. Now, just a few hours later, the U.S. Senate has picked up the ball on a potential U.S. digital currency.

According to CoinDesk, S. 3571 introduced by Sherrod Brown, proposes a digitized version of the U.S. dollar. The digital dollar will consist “of digital ledger entries recorded as liabilities in the accounts of any Federal Reserve bank.”

The bill notes that such wallets would be branded as “FedAccounts.”

Like the House bill, the Senate bill will require all banks that are members of the Federal Reserve and regulated by the Fed to establish a pass-through digital dollar wallet. Banks that are not members of the Federal Reserve will also be able to opt-in to offer pass-through digital dollar wallets as well.

The House bill also tasked the U.S. Postal Service to assist unbanked individuals and/or those without proper ID to establish a digital dollar account and set up ATMs for customers to access their funds. However, it’s unclear at this time if the Senate bill includes that provision.

The House draft also mentioned the digital dollar as a potential method for distributing relief funds to U.S. residents during the ongoing coronavirus outbreak. However, the Senate bill does not mention relief for the coronavirus outbreak.

Daniel Gorfine, the founder of fintech advisory firm Gattaca Horizon, believes the idea of a US-based cryptocurrency is something the government should look into.

“It is worth exploring, testing, and piloting a true USD central bank digital currency and broader digital infrastructure in order to improve our future capabilities and resiliency,” Gorfine told Forbes Monday. “But it is also important that this effort not delay the government from deploying critical emergency funds using existing channels during this crisis.”

Cryptocurrency is a significant untapped resource for African Americans. Earlier this month, Nigeria received its first bitcoin ATM. The book, Bitcoin and Black America, analyzes the role cryptocurrency can have in helping African Americans, a group historically underserved and underrepresented by major financial institutions.