U.S. government finally seriously considering the creation of a digital dollar, that could help Bitcoin

By Selena On Mar 24, 2020

According to a Bloomberg Law report released Monday, Democrats in the House of Representatives are seriously considering the creation of a system of digital wallets, in which a “digital dollar” (unfortunately not Bitcoin) would be stored. This intent was revealed in a legislative text published Monday by the House Financial Services Committee Chairwoman Maxine Waters.

As the kids say, NEWS: House Democrats have proposed creating a ‘digital dollar’ for direct payments to individuals. W/@ElleBeyoud https://t.co/eACudrLseP

— Colin Wilhelm (@colinwilhelm) March 23, 2020

The digital dollar is about to be released?

The US government seems to be seriously considering creating a digital dollar, a move that many people believe can validate cryptocurrencies, especially Bitcoin.

Peter Van Valkenburgh, Director of Research at Bitcoin advocacy CoinCenter, said:

“The text defined the term” digital dollar “as one of two things: 1)” a balance described as a dollar value consisting of digital ledger entries “and 2)” an electronic unit of value, redeemable by an eligible financial institution.”

So it looks like Speaker Pelosi’s recent draft COVID-19 stimulus bill includes a digital dollar section. pic.twitter.com/tN8P61WzY5

— Peter Van Valkenburgh (@valkenburgh) March 23, 2020

Of course, the idea with this is that it would be much easier to enact Hill’s proposed stimulus plan against economic disaster to provide every thousand of US dollars through a digital system instead of through physical systems. Large Federal Reserve banks and other financial institutions will need to provide digital wallets to individuals and joint tax filers eligible for direct governmental emergency payments currently under negotiation in the historic economic relief package.

While it is unclear exactly how such a system will work, many people in the Bitcoin space have named it a central bank digital currency. And certainly won’t call it cryptocurrency.

This move can still help Bitcoin

Nathaniel Whittemore, a cryptocurrency analyst, said the move could help Bitcoin. He explained this theory by pointing out a process of four theoretical steps that would take place if this text became a reality:

A Scenario:

Step 1: Introduce digital dollar to ship stimulus payments.

Step 2: Hundreds of millions of Americans get their first digital wallet.

Step 3: Trillions of stimulus leads to..well..you know.

Step 4: Do you really need me to say it? #Bitcoin pic.twitter.com/CbHl5LMXNR

— Nathaniel Whittemore (@nlw) March 23, 2020

Notably, stimulation can occur without a digital system. Still, a digital system available to anyone with internet access is likely to increase the effectiveness of the measures, thereby increasing the amount of money generated and pumped into the economy.

Binance CEO: Legacy financial system is broken, but Bitcoin facing long road to adoption

In a new blog post, CZ analyzes a corporate culture where CEOs are trained to push for short-term results. Instead of saving cash to build a strong balance sheet to survive a crisis, executives are rewarded by deploying most of their profits for stock buybacks.

But Zhao says he believes CEOs are not directly to blame, placing the spotlight on a system that drives them to maximize shareholder value with bonuses worth millions of dollars. So when a crisis like Coronavirus strikes, many companies find themselves without rainy-day funds and struggle to survive. A much easier game plan for navigating an economic crisis, says CZ, is waiting for the government to print money and bail them out.

CZ stated:

“With printing money, the taxpayers are robbed (made poorer) indirectly, but they don’t complain much. At least, not as much as if a bank failed, such as Lehman, then everyone knows exactly who to blame, which CEO/regulator/politician failed, etc. When printing money this way, everyone saves face and is happy, except for the poorer retail guys. But they don’t know anything, do they, so it’s ok.”

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