United States, China, and France to Create Digital Currency amid COVID-19

Recently, a bill named ‘Banking for All’ has been presented before the senate by the Ranking Member of the Senate Banking Committee, U.S. Sherrod Brown. He unveiled the details of the bill and highlighted the way he is going to influence his colleagues to include it as part of the coronavirus economic stimulus package.

The bills include a definition for digital dollars and digital dollar wallet, furthermore, it ensures the provision for a pass-through digital dollar wallet with the directive for all member banks to open and maintain digital dollar wallets for all individuals especially for those who are eligible to receive the incentive.

“At the height of this pandemic, we must do more to protect the financial wellbeing of hardworking Americans and consumers. They are on the front lines of this crisis and are already feeling the effects of the economic fallout. My legislation would allow every American to set up a free bank account so they don’t have to rely on expensive check cashers to access their hard-earned money,” said Sherrod Brown.

In the United States, most of the banks are supervised by OCC the vast majority of banks, however, a few big banks including Wells Fargo are the exception to other banks.  The banks that work under the supervision of OCC have the option to be members of the Federal Reserve and to buy shares in the Reserve as a way of becoming a ‘member bank.’ These banks are then supervised and regulated by the Federal Reserve. A ‘non-member bank’ is a bank that chooses not to be a ‘member’ of the Federal Reserve and is regulated by the FDIC.

A clause in the bill that online applications for pass-through digital wallets must be made available for the larger banks. It states that “The pass-through digital wallet contains consumer protection terms where it notes the wallet ‘shall not be subject to any account fees, minimum balances, or maximum balances and shall pay interest at a rate, not below the greater of the rate of interest on required reserves and the rate of interest on excess reserves.”

The bill also includes orders for each agency to contribute to the supply of digital dollar wallets for all. The Federal Reserve may maintain digital dollar wallets, it may not be able to have a branch in low-income areas. ATMs will be provided at the US post offices for the access of digital cash.

All the bigger economies in the world are executing the concept of digital currency, after the digital dollar, China’s digital currency yuan is in pipeline, digital euro is not far behind as it is being dawdled by France’s central bank. 

The Banque de France organized an experimental program to test the integration of digital euro in settlement procedures. It has been intended to measure both the potential of decentralized technologies and broader uses of central bank digital currencies.

The Banque de France stated, “A host of market infrastructure projects are underway, especially in Europe, aimed at helping financial markets to function more effectively and more smoothly.”

Furthermore, the Bank also that the trial is pointing to show how traditional interbank settlement can be carried out using central bank digital currency.

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