US, WASHINGTON (ORDO NEWS) — An emergency economic stimulus plan is currently being finalized between the two houses of the United States Parliament. Among other planned decisions, the democratic representatives proposed an unprecedented measure: the creation of a “digital dollar”, managed by the Federal reserve (Fed), the American central bank.
The proposal was ultimately not retained in the final agreement. Not surprisingly, such a measure would involve the construction of a complex technological infrastructure, a lot of organization and would pose multiple legal questions. A device that seems far from being ideal in the emergency of the situation.
It still shows, however, that the creation of a digital dollar is being seriously considered by parliamentarians – it is probably not the last time we hear about it.
The virtue of this system lies in the fact that, in the case of an emergency plan such as the one being discussed at the moment, it would be possible to transfer money to the population more quickly than today .
The stimulation plan indeed provides for sending cash to a certain number of citizens , according to eligibility criteria. If possible, these payments will be made via a transfer to their bank account.
However, a simple transfer is far from always possible. In the United States, the right to an account does not exist and 25% of households have no or limited access to banking services.
In these cases, a check is mailed, which can take up to four months. However, people who do not have a bank account or who have difficult access to it belong to the poorest categories of the population.
A digital dollar would involve creating accounts with the Fed itself, without having to go through a bank. Payments could thus be made very quickly, by automatically crediting the personal accounts of eligible persons.
Jerome Powell, the chairman of the Fed, says he is studying the possibility of creating a virtual dollar. It is noted by the Wall Street Journal that such a system would strengthen the powers of the central bank by allowing it to act directly with households, and no longer only by trying to influence the markets – a profound paradigm shift. Powell notes, however, the questions that such a digital currency poses in terms of privacy and cyber security .
The idea of a digital currency is not only gaining ground in the United States. The Banque de France has announced that it wants to experiment with a virtual euro to settle transactions on the financial markets. China would also work on the possibility of using a digital Yuan .
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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.