Because of the problem that is currently being experienced before the problem that is generating the spread coronavirus (Covid-19), it is estimated that probably it will have even more profound impacts.
Before this in the United States the Democrats have just proposed a bill for the creation of a means of payment as assistance and financial protections dedicated to American consumers, states, businesses and vulnerable populations during this great health crisis, in light of the emergency situation.
This time in the economic and monetary plan the green light was given to the creation of a 'digital dollar'. In fact, this initiative certainly will disrupt the American economy (and the global economy inevitably), but it will also have considerable consequences in the world of digital currency.
In this bill, the "Digital dollar" is defined as "a unit of electronic value", "A balance expressed in monetary value made up of digital inputs" which will be financed by the Federal Reserve of the United States.
It shows how determined the United States can be to align something that is likely to impact the cryptocurrency and blockchain industry. We wonder about the reactions of the main stakeholders, including those who have recently expressed interest in creating a cryptocurrency, such as Facebook, which started a project to circulate its virtual currency, Libra.
It is true that this it is part of an emergency plan to financially support people in economic fragility during this critical period due to the coronavirus epidemic.
But the scale of this innovation surely goes beyond this framework, because it is also a "spur" for the revival of the US economy now in recession due to the health crisis.
Hence the integration of companies as entities also beneficiaries of this recovery plan. It should also be said that it is a kind of accelerator for the extension of access to banking services For US citizens who are not yet banked (estimated at about 63 million people): the US Postal Service will provide them with a digital dollar account.
Could be a good thing for digital currencies by bringing hundreds of millions of Americans into the world of cryptocurrencies, especially since it would involve trillions of dollars that will then be injected by the Federal Reserve.
Moreover, if this health crisis lasts longer than expected, we can expect the depreciation of the dollar, which will lead to turn to cryptocurrencies to try to protect against this devaluation.
In any case, this health emergency may simply be a means for some members of Congress to reignite the debate over the design of a state cryptocurrency.
It should be remembered that, in September 2019, two senators already mentioned the interest that the country does not continue to be a spectator in the face of the increase in digital currencies so as not to be surpassed by others in this area, citing more particularly the CBDC (digital currency of the central bank) Chinese.
Therefore, the bill has received favorable feedback from leading figures, like Daniel Gorfine of Fintech Gattaca Horizons and founder of the Digital Dollar Project, who welcomes this initiative, as the deployment of a digital infrastructure in this direction will still require a lot of time, especially in reflection and negotiations between the government and the private sector stakeholders.
EMTECH's Carmelle Cadet also suggests that using checks as a payment method instead of the digital dollar will result in under-spending of approximately $ 100 billion in incentives that low-income households should spend. In fact, each American beneficiary can receive up to $ 2,000 in support per month until the coronavirus crisis is over.
As for who these "qualified persons" are that they would use the new dollar and wallets, the previous version of the draft said that is anything but "any non-resident foreign person"In other words, only qualified US citizens and legal permanent residents as well as US-based companies would receive emergency monthly payments in digital dollars.