From the House of Representatives a party proposes a 'Digital Dollar', will this be good for Bitcoin?
11 years after Satoshi Nakamoto launched Bitcoin, some facets of the US government have finally indicated that they are seriously considering creating a digital dollar, a move that many say could validate cryptocurrencies, especially BTC.
According to a report According to a Bloomberg Law report published Monday, Democrats in the House of Representatives are seriously considering the creation of a digital wallet system, in which a "digital dollar» (unfortunately not Bitcoin). This intention was revealed in a legislative text published on Monday by the chairwoman of the House Financial Services Committee, Maxine Waters. The text, or at least one related to it, was shared by Peter Van Valkenburgh, Research Director at Bitcoin Advocacy CoinCenter.
No products found.
Can a Digital Dollar Indirectly Convenience Bitcoin?
The text defined the term "digital dollar» as one of two things: 1) «a balance expressed as a dollar value consisting of entries in the digital ledgerl» and 2) «an electronic unit of value, redeemable by an eligible financial institution«.
The idea, of course, is that it would be much easier to implement Hill's proposed stimulus plan against the economic disaster. To give each American thousands of dollars through a digital system instead of a physical system of, say, checks. As Bloomberg wrote:
Large Federal Reserve banks and other financial institutions will provide digital wallets to eligible individuals and joint taxpayers for direct government emergency payments currently under negotiation in the historic financial aid package.
While it's unclear how exactly such a system will work at scale. Many in the Bitcoin space have already dubbed it a "central bank digital currency" or CBDC. Although they have made sure not to call it a “cryptocurrency.”
According to Nathaniel Whittemore, a cryptocurrency analyst, this move could help Bitcoin. He explained this theory by pointing to a four-step process that can take place if this text becomes reality:
- “Introduce digital dollars to send stimulus payments.”
- «Hundreds of millions of Americans get their first wallet.»
- Trillions of dollars of stimulus. Assuming the crisis lasts longer and has a greater economic impact than expected, it will lead to the degradation of the dollar.
- Bitcoin surges as many try to find a hedge against their devalued dollar.
Notably, the stimulus could occur without a digital system. But a digital system available to anyone with Internet access would likely increase the effectiveness of the measures. Thus increasing the amount of money that is injected into the economy.
