Explained: Difference between digital dollar and CBDC
cnbctv18.comA group of lawmakers in the US recently proposed new legislation which would allow the country’s Treasury Department to create an electronic version of the US dollar. Representatives Stephen Lynch (Massachusetts), Jesús Chuy Garcia (Illinois), Ayanna Pressley (Massachusetts) and Rashida Tlaib (Michigan), all Democrats, were behind the ‘Electronic Currency And Secure Hardware Act’ (ECASH Act), which will direct the US Treasury Secretary (Equivalent to the Union Minister of Finance in India) to create this digital dollar, effectively bypassing the US Federal Reserve.“As digital payment and currency technologies continue to rapidly expand and with Russia, China, and over 90 countries worldwide already researching and launching some form of Central Bank Digital Currency, it is absolutely critical for the U.S.
to remain a world leader in the development and regulation of digital currency and other digital assets,” said Lynch.Also read: Closet crypto fan Jared Kushner had mooted idea of digital dollar back in Trump era: ReportIs the digital dollar going to be a CBDC?With the creation of the digital dollar falling on the Treasury Department in the proposed legislation, the Federal Reserve Board will be bypassed in the issuance of this digital currency. As the central bank will not be involved in the issuance, the digital dollar would not be considered a Central Bank Digital Currency (CBDC).
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