The idea of having a digital dollar is something that has emerged in the US, and across the world as Central Bank Digital Currencies, for some time now. The idea of fast tracking this potential idea came about when the US was imagining its massive stimulus program and proposed distributing funds through a digital dollar.
However, the bill has now passed and the idea of having a digital dollar has been stripped out — this time. That is to say that there is still plenty of opportunity for such a financial tool to emerge and be a part of the lives of Americans in the future.
As it stands, there are a number of congressmen and regulators who believe that a digital dollar is a case of when, rather than if. And two more notable advocates for a digital dollar are J. Christopher Giancarlo and Daniel Gorfine. The pair worked together at the Commodities and Futures Trading Commission (CFTC), where Giancarlo served as Chair. Gorfine led the commission’s FinTech innovation office, LabCFTC.
One for the future, not a crisis
The brief emergence of the digital dollar in the “Coronavirus Aid, Relief, and Economic Security Act” and its subsequent stripping out were probably a good thing for if this is to become a norm, a crisis would not be a good time for this to happen.
“The United States has to proceed thoughtfully, intelligently, deliberately. We advocate pilot programs as a way to explore the utilization of the digital dollar and how it can be used, including how it can be used in a crisis. But I think one needs to be very cautious about trying to launch something as big as this amidst a crisis,” Giancarlo told Cointelegraph.
Gorfine identified that the spread of funds to American citizens in need of aid as a good use case for a digital dollar, but he added that the present crisis might be too soon for such an implementation.
“This crisis has demonstrated that some of our processes don’t seem to match a 21st-century leading economy in terms of capabilities. It’s not surprising that there’s now focus on whether there are better, more efficient ways to go about moving funds,” explained Gorfine. “It’s also important that pursuing something like this doesn’t become a distraction from getting necessary funds out in a really expedient fashion.”
On the plus side, even though the digital dollar was scrapped this time around, it will at least have people looking at its potential — according to Giancarlo:
“It’s clear that as the public sector talks about seeking to find ways to get money into people’s hands efficiently, effectively, quickly, and also to get money in the hands of people who are either underbanked or unbanked, the value of a digital dollar becomes quite clear as a delivery mechanism.”