The digital dollar was recently cast out of the United States’ $2 trillion economic stimulus package designed to boost the country’s infrastructure following damage caused by the coronavirus.
The Digital Dollar Could Have Done So Much
Many analysts agree that the notion of a digital dollar would likely be of great aid to bitcoin and the crypto industry, and that regulators initially missed a huge opportunity to support one of the finance world’s biggest tools.
While the idea of digital dollar version of U.S. fiat has been in federal lawmakers’ heads for some time, the idea gained newfound support last February by the likes of Federal Reserve Chair Jerome Powell, who explained that the Fed was potentially working on providing a digital version of USD. This occurred when he gave a speech in front of the U.S. House Financial Services Committee.
At the time, things were going quite well for the country financially. Bitcoin, for example, was reaching its 2020 high of more than $10,300. In addition, stocks were also posting record highs, suggesting that the U.S. was in a top position to enter the crypto market and put itself on the same plane as regions such as China, Iran and others.
However, the digital dollar found itself disappearing from regulators’ heads when the coronavirus entered U.S. soil, causing widespread panic and alarm. Though it was ultimately suggested as a potential combatting tool – regulators wanted to ensure Americans received stimulus checks electronically rather than through the mail as a means of preventing further contamination – this idea didn’t come about.
Indeed, the establishment of a digital dollar would have probably provided a healthy dose of support for bitcoin and its altcoin cousins, but analysts are confident that the United States will eventually step up to the plate. For them, it’s not a question of if… but rather when the country decides a digital dollar will be necessary.
CEO of De Finer Jason Wu believes that should the United States ever decide to move forward on the project, this will inherently educate several people on the notion of blockchain and help the technology to achieve mainstream status. He commented in a statement:
Bitcoin is the digital gold in the world of digital assets. The GDP of the digital world is captured by bitcoin. Therefore, the price trend of bitcoin will [certainly] go up… Currently, a lot of technical details around the proposed Fed digital dollar is not available. We will have to wait and see whether it leans more towards the centralization or the decentralization path.
A Future Project?
Ashish Singhal – co-founder and CEO of CoinSwitch.co – states:
The idea of a Fed digital dollar will undoubtedly boost bitcoin prices. It’s a strong indication of mass adoption for cryptocurrencies pushed by none other than the government.