On Thursday, US lawmakers held a hearing evaluating the potential benefits of on the Digital Dollar and how digital tools could be used to issue relief to people affected by the recent COVID-19 lockdown.
The discussion increases the potential of major governments adopting a form of digital payment, with the FedAccount being discussed as an option to issue capital to citizens.
Industry experts are understandably excited at the developments, with Andy Ji, Co-founder of Ontology, stating: “Similar to China’s Digital Currency Electronic Payment (DCEP), US plans for a digital dollar propose a two-tiered system. This design means it will not break existing structures of currency circulation, as the digital currency will be distributed through traditional commercial banks and regulated intermediaries. ”
John Wu, President of AVA Labs, added: “It’s undoubtedly positive to see Congress continue to increase its interest in understanding how digital currencies can be adopted by governments to empower more open exchange of assets in the borderless, internet-driven economy of the future.
“The shortcomings of our financial system have been laid bare throughout the COVID-19 pandemic, and it is incumbent upon these leaders to not only patch over these fractures, but proactively build a new foundation for the American economy. A foundation that is decentralised, accessible, and committed to protecting the privacy of individuals.”
US lawmakers and regulators heaped scepticism and criticism on Facebook’s proposed digital currency, Libra, last year. But this new development may bode well for Mark Zuckerberg’s blockchain-based proposal as it demonstrates a softening of attitudes towards emerging technology.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.