Coronavirus Update: How the proposed United States “digital dollar” would impact Bitcoin?

  • The House of Representatives' Democrats are confident with the idea of a digital dollar in times of crises like the Coronavirus.
  • Bitcoin would be the ultimate beneficiary of a digital dollar that is driven to launch as a means of distributing relief money to Americans.

The United States House Democrats have been drawn to the idea of having a digital dollar 11 years after Bitcoin was launched. The House of Representatives' democrats, according to a report released on Monday by Bloomberg Law are putting serious consideration towards the launch of a “digital dollar. It is envisioned to consist of a system of digital wallets that would be used to store and transfer value. The idea was made public in a text by the House Financial Committee Chair, Maxine Waters.

A digital dollar has easily been identified as an alternative to traditional fiat payments in times of crises such as the ongoing Coronavirus pandemic. The text, which was shared by the Director of Research at Bitcoin advocacy CoinCenter, Peter Van Valkenburgh referred to the digital dollar as one “a balance expressed as a dollar value consisting of digital ledger entries” and two “an electronic unit of value, redeemable by an eligible financial institution.”

The proposal is in light with the Hill’s plan to distribute money to the American people in a bid to avert a potential economic crisis. A digital system would be easier to manage as opposed to a physical fiat system especially in situations where lockdown is imposed. As per the Bloomberg report:

Large Federal Reserve banks and other financial institutions [will need] to provide digital wallets to individuals and joint tax filers eligible for direct governmental emergency payments currently under negotiation in the historic economic relief package.

The mechanics of such a digital system are not clear at the moment, however, people have been quick to dub it a “central bank digital currency.” The move, however, is expected to positively impact Bitcoin.

In his opinion Nathaniel Whittemore, a crypto analyst believes that such a system will see all Americans exposed to a digital wallet. Moreover, if the crisis continues longer than expected, the US dollar is bound to fall in value. At the same time, Americans could start seeking alternatives to hedge against the falling dollar. Bitcoin is likely to benefit from such a scenario, becoming the ultimate hedging asset.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News & Analysis

Editors’ Picks

Bitcoin Price Forecast: BTC/USD next critical breakthrough is eyed at $7500

Bitcoin price is trading in positive territory, up 1.05% in the second half of the session. BTC/USD is being capped for the time being by a barrier at $7500. The price has been consolidating near-term, following the critical $7000 breakthrough. 

More Bitcoin News

Ripple Price Analysis: Intraday price action holds at 0.20 but only just

Ripple is looking good at the moment as the market continues to make higher highs and higher lows. It seems like the bulls are in a fight to keep the price above 0.20. Looking at the black resistance ...

More Ripple News

Ethereum Price Analysis: Next stop 200.00

Ethereum is trading higher today as more bullish sentiment kicks in. Most of the crypto majors are trading higher as the whole space enjoys a good run.  Looking at some technicals now, the price is trading above the 55 and 200 4-hour moving averages which is also a good sign. 

More Ethereum News

LTC has consolidated in the mid 40's as we await the next move

Litecoin has had a great run and now the price has consolidated somewhat. The price has started to make some lower highs along with some higher lows. This then creates a triangle pattern and the market must now wait for a break for clues to the future direction. 

More Litecoin News


Bitcoin Weekly Forecast: BTC breaks its ties with stocks, strives to return its safe-haven status

Most part of the week Bitcoin has been on the recovery path. Slowly but surely the coin left $6,500 behind and even tested waters above $7,000.

Read the weekly forecast