News headlines across the internet have been flooded with signs that a “digital dollars” may be coming soon. Seeing the US House of Representatives came up with a draft bill that addresses the authorization of a trillions of dollars stimulus to states, businesses, consumers, and populations that are vulnerable to the COVID-19 virus.
The bill mentioned the digital dollar concept, as it could help the US Federal Reserve, which prints the US dollars, to send the financial stimulus straight to the people. The concept was inspired by Bitcoin (BTC) and the blockchain technology behind it, which allows people to send value to one another. It was working behind the scenes until now, but many have now suddenly seen how helpful it could be for them. After all, why give money to the banks when the recipients are in fact, actual people?
The eThaler Project
The blockchain consortium Hyperledger had a meeting in which the new eThaler project was discussed, a project that brought into the spotlight the urgency of creating a central bank digital currency (CBDC), running on the Ethereum blockchain.
The previously mentioned bill was sponsored by Maxine Waters, a California Congresswoman and House of Financial Services Committee chair, and mentions digital dollars, which until now were only a theoretical concept but turned into an urgency.
The US Finally Taking the Digital Dollar More Seriously
The digital dollar being mentioned in a House bill next to the Federal Reserve indicates that one of the world’s largest economies is now officially considering entering the race in which other central banks from other countries are already competing. Here’s what Vipin Bharathan, Hyperledger’s chair and a JP Morgan Chase former senior developer, has to say about what’s going on at the moment with this matter:
“The concept of the CBDC seems to have gotten an imprimatur from the house finance committee. That’s a significant step, and I argue that such crisis situations always produce new ideas, and acceptance of new ideas, that will live on long after the coronavirus has burned through the world.”
More on the eThaler
The eThaler is supposed to be fungible, so it doesn’t matter what central bank is going to end up minting it, it will have the same value for each token as its underlying asset, no matter for what purpose it has been used before.
Just like fiat currency, it would increase its initial supply of tokens through minting, or else it would get destroyed through the process known as burning. The bank would set its decimals, which are essential for micropayments and online transactions that can’t be made with fiat. Furthermore, the currency would be pausable if bugs in the software would be discovered or updates implemented.