A draft bill posted Tuesday to the U.S. Senate Committee on Banking, Housing and Urban Affairs defines a “digital dollar” and details how it might be maintained. The bill echoes language from a pair of draft U.S. House bills aimed at stimulating the economy during the coronavirus outbreak.
The bill, introduced by Ranking Member Sen. Sherrod Brown (D-Ohio), is not proposing a crypto dollar but a digitized version of the existing dollar, a process advocates including former Commodity Futures Trading Commission (CFTC) Chairman Chris Giancarlo have called for to maintain U.S. financial hegemony.
According to the draft, the digital dollar will be “dollar balances consisting of digital ledger entries recorded as liabilities in the accounts of any Federal Reserve bank.”
The bill even notes that such wallets should be branded as “FedAccounts.”
Like a pair of draft bills in the U.S. House of Representatives, the proposed digital dollar would be operated and maintained by the Federal Reserve (the U.S. central bank). The Fed would be responsible for maintaining the digital wallets to support the funds, on behalf of individuals.
Federal Reserve member banks could create a “pass-through digital dollar wallet,” which would hold a person’s share of a pooled reserve balance that the member bank maintains at any Fed bank.
“Each member bank shall establish and maintain a separate legal entity for the exclusive purpose of holding all assets and maintaining all liabilities associated with pass-through digital wallets,” the bill states.
States might also designate some non-member banks to offer these wallets.
The House draft bills mentioned a digital dollar as one potential method for distributing relief funds to U.S. residents during the ongoing coronavirus outbreak. Unemployment numbers have spiked as social distancing and “shelter-in-place” orders have cut sharply into retail revenues.
However, the Senate version appears to exist independently of any such relief.