Coronavirus

Stimulus check: What is the "Digital Dollar" option being discussed by Congress?

The United States House Committee will be holding a virtual hearing on Financial Services about Digital Dollar or central banking digital currency (CBDC).

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Stimulus check: What is the "Digital Dollar" option being discussed by Congress?
Nguyen Huy Kham REUTERS

As Democrats and Republicans are trying to discuss the terms of a second bill that, among other measures, will give millions of Americans a second round of stimulus payments, the House Financial Services Committee will discuss how to improve the delivery as 35 million people are still waiting to receive the first stimulus payment.

Morgan Ricks, a professor at Vanderbilt University Law School, in the past has said that a digital dollar should allow consumers to hold central bank accounts. On the other hand, Chris Giancarlo, former CFTC Chair and founder of the Digital Dollar Foundation, has insisted on using a tokenized digital dollar, based on blockchain or distributed ledger technology (DLT).

On Thursday Congressman Stephen Lynch will oversee a hearing called, “Inclusive Banking During a Pandemic: Using FedAccounts and Digital Tools to Improve Delivery of Stimulus Payments.”

Last week the Digital Dollar Project published its first white paper and now the United States government needs to consider how to design a digital dollar because China is already under a digital currency and this could affect the U.S. dollar’s value.

Giancarlo said in an interview with The Block that the pandemic is advancing key questions about how to deliver public benefits more effectively and it is known that one of the bills drafted from the House Democrats has a Digital Dollar proposal.

oth Ricks and Giancarlo will be joined by Jodie Kelly, CEO of the Electronics Association and Mehrsa Baradaran, a professor of law at the University of California, Irvine and the hearing is scheduled for 12pm ET on Thursday.