In brief
- A new coronavirus relief bill has brought back the idea of creating a “digital dollar.”
- The ABC Act wants to authorize the Fed to create a framework.
- Former CFTC Chair Christopher Giancarlo argues that the project should not be rushed.
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A new coronavirus relief bill proposed by US Congresswomen Rashida Tlaib and Pramila Jayapal on April 16 has brought back the idea of creating a “digital dollar.”
Per the bill, titled “Automatic BOOST to Communities Act” (ABC Act), Congress should authorize the Federal Reserve to create a framework for “Digital Dollar Account Wallets”—branded as “FedAccounts”— that could be used by US citizens, residents and local companies to access financial services.
“No later than January 1, 2021, the Secretary shall offer all recipients of BOOST payments the option to receive their payments in digital dollar wallets,” the bill proposes.
While the bill does not explicitly state that digital dollars should be based on blockchain or are some form of a cryptocurrency, the terms it uses sound all too familiar. For example, the “Digital Dollar Cash Wallets” should allow users “to store, send, and receive digital coins or other digital currency instruments issued by the United States Treasury as legal tender.”
The digital dollar shouldn’t be rushed
Yet, according to J. Christopher Giancarlo aka “Crypto Dad” and ex-chairman of the Commodity Futures Trading Commission (CFTC), the digital dollar project should not be rushed because of the global pandemic.
“The digital dollar is a much larger undertaking than just a federal government payments infrastructure. It means a tokenized, digital form of US legal tender with all the future advantages and challenges it will engender,” wrote Giancarlo, in an op-ed for Coindesk.
“Something as complex and worthy of the US dollar’s global importance should not be cobbled together in a crisis. Getting it right will take time. Nevertheless, now is the right time to get started,” Giancarlo added.
Giancarlo launched the Digital Dollar Project in January—a joint initiative of global consultancy firm Accenture and the Digital Dollar Foundation.
“The Digital Dollar Project proposes something far more fundamental: a new, additional format for US currency, a digital dollar that has the same legal status as the dollars in one’s purse, only on a personal device,” he said.
As Decrypt reported previously, David Treat, the global head of Accenture's Capital Markets and one of the directors of the Digital Dollar Project, has also stated that the digital dollar “is not something that can be done in weeks.”
But with China rolling out its digital yuan over the next few months, it may already be too late.