To help provide U.S. taxpayers with stimulus payments to get through the recession brought about by the coronavirus, the idea of a digital dollar has been brought to light once again by legislators. The Automatic BOOST to Communities Act (ABC Act) reintroduces the digital dollar concept and uses similar language to legislation brought forward in March per Coindesk.
The bill was brought forward on the heels of continuing troubles with the $1,200 stimulus payments that the CARES Act authorized. The Internal Revenue Service (IRS) has been giving out payments to taxpayers. However, many people have not received their funds or have the ability to verify the status of their payments because of problems.
Under the ABC Act, Congress would have the Fed make “FedAccounts” that would let citizens, companies and residents in the nation access financial services. Legislation from Thursday indicated per the report that “no later than January 1, 2021, the Secretary shall offer all recipients of BOOST payments the option to receive their payments in digital dollar wallets.”
The idea first showed up in the “Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act” and the “Take Responsibility for Workers and Families Act.” The digital dollars, for their part, are not stablecoins and don’t seem to be based on any kind of blockchain technology.
The Bank of International Settlements (BIS) earlier in April took note of shifting consumer attitudes toward cash in a “COVID-19, Cash and the Future of Payments” report. And when it comes to card payments, “Scientific evidence suggests that the probability of transmission via banknotes is low when compared with other frequently-touched objects, such as credit card terminals or PIN pads.”
The BIS said against that backdrop that “resilient and accessible central bank operated payment infrastructures could quickly become more prominent, including retail central bank digital currencies.”