A draft bill posted to the U.S. Senate Committee on Banking, Housing and Urban Affairs on Tuesday sets out a “digital dollar” and details how it could be maintained. The bill echoes language from a US draft pair. House bills were designed to stimulate the economy during coronavirus outbreaks.
The bill, introduced by Ranking Member Sen. Sherrod Brown (D-Ohio), does not propose a crypto dollar but a digitized version of the existing dollar, a process advocates including former Chairman Chris Giancarlo of the Commodity Futures Trading Commission (CFTC) called for the preservation of US financial hegemony.
The digital dollar will be “dollar balances consisting of digital ledger entries recorded as liabilities in the accounts of any Federal Reserve bank”.
The bill even notes that such wallets should be branded as “FedAccounts”.
Digital Dollar to be Operated and Maintained by Federal Reserve
The proposed digital dollar would be operated and maintained by the Federal Reserve (the U.S. central bank) as a couple of draft bills in the U.S. House of Representatives. The Fed, on behalf of individuals, would be responsible for keeping the digital wallets to support the funds.
Member banks of the Federal Reserve could create a “pass-through digital dollar wallet,” which would hold a person’s share of a pooled reserve balance maintained by the member bank at any Fed bank.
“Each member bank shall establish and maintain a separate legal entity for the exclusive purpose of holding all assets and maintaining all liabilities associated with pass-through digital wallets,” the bill states.
During the ongoing coronavirus outbreak, the House draft bills mentioned a digital dollar as one potential method of distributing relief funds to US residents. Numbers of unemployment have increased as social distance and “shelter-in-place” orders have sharply reduced into retail revenue.
Nevertheless, the Senate version seems to exist independently of any such relief.