To help bolster the American economy amid the COVID-19 pandemic, the Federal Reserve could utilize digital wallets and a “digital dollar” to provide “qualified individuals” with payments. With passing of the draft legislation, legal adults would receive $2,000 and $1,000 would be provided for each child, Yahoo! Finance reported.
The bills are called the “Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act” and the “Take Responsibility for Workers and Families Act.”
Neither bill specifies the use of any type of digital currency initiative. According to the report, the bills indicate that “the term ‘digital dollar’ shall mean a balance expressed as a dollar value consisting of digital ledger entries that are recorded as liabilities in the accounts of any Federal Reserve bank; or an electronic unit of value, redeemable by an eligible financial institution (as determined by the Board of Governors of the Federal Reserve System).” The Fed would be in control of the digital wallets.
In addition, member banks of the Fed can have a “pass-through digital dollar wallet” per the draft bills, as cited by the outlet. Recipients of payments would get a “pro-rata share of a pooled reserve balance” that the member keeps.
The news comes as The Federal Reserve rolled out a massive aid package on Monday (March 23) to support the American economy to alleviate the impact of COVID-19, announcing as much as $300 billion in financing for consumers and companies, as well as an unlimited amount of “quantitative easing.”
The central bank noted in an announcement, “The Federal Reserve is committed to using its full range of tools to support households, businesses and the U.S. economy overall in this challenging time. The coronavirus pandemic is causing tremendous hardship across the United States and around the world.”