Digital USD Included in Congress Stimulus Bill

The Democrats bill on supporting the economy in the context of the coronavirus pandemic involves the creation of a digital version of the dollar and wallet to provide incentive payments. About it writes The Block.

The current version of the bill has not yet been published and will undergo further improvements. The inclusion of the digital dollar clause has sparked a heated debate about the infrastructure for wallets. Its authors acknowledge that this is not about creating a cryptocurrency or using a blockchain.

According to the document, a digital dollar is defined 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.

Another definition states that it is also an an electronic unit of value, redeemable by an eligible financial institution (as determined by the Board of Governors of the Federal Reserve System).

The wallet for digital dollars in the bill received the following definition: a digital wallet or account, maintained by a Federal [R]eserve 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. 

The document also mentions a “pass-through digital dollar wallet,” which means a digital wallet or account, maintained by a member bank on behalf of a qualified individual, where such qualified individual is entitled to a pro rata share of a pooled reserve balance that the member bank maintains at any Federal [R]eserve bank.

Qualified natural persons legislators recognize anyone over the age of 16 years, with the exception of a non-resident of the United States.

The latter type of wallets will be designed to receive incentive payments from the government. These wallets will be stored by reserve banks of the Fed through separate legal entities.

The bill recommends that banks immediately provide the opportunity to open such transit wallets for digital dollars online or via telephone.

Banks will not be able to charge any fees on them and will be required to provide functionality that is not inferior to existing offers in the financial market.

The document sets a deadline of January 1, 2021, during which time the creation of transit wallets for all citizens and US resident companies is set aside.