That several countries are trying to develop their own digital currency is no longer news. And the United States, as usual, would not like to be left behind in this digital currency race. To this end, Senator Sherrod Brown is urging the Federal Reserve to strongly look into the possibility of creating a digital dollar.
In a letter he wrote to the Chairman of the Federal Reserve, Jerome Powell, on March 1st, he lent his support for a study into a possible central bank digital currency (CBDC). Part of his letter reads, “The Federal Reserve must lead the way on CBDCs and other digital payments, just as the Federal Reserve has done in moving forward with its faster payments system, FedNow.”
Institutional Adoption: A Sign Of The Times
He pointed out the recent purchases and adoption of Bitcoin by some blue-chip companies as a sign of the times we live in. Sen. Brown opined that several other countries are making strong efforts towards dominating the payment market and urged the Federal Reserve to act fast so as not to be left behind.
His letter also noted that Bitcoin and other cryptocurrencies are extremely volatile and highly speculative and could be used for criminal activities. They also require huge amounts of electricity, thereby putting a strain on costs of electricity.
Sen. Brown said that the Federal Reserve should go beyond regulating private digital assets companies and go on to explore a digital dollar. US Treasury Secretary Janet Yellen leans towards cryptocurrencies. She recently said that CBDC would result in financial inclusion among Americans.
In 2020, Sen. Brown sent a bill (The Banking For All Act) to the US Senate. In the bill, he proposed that a digital wallet (FedAccount) should be issued to citizens. Funds from the government would be sent to this wallet as digital dollars and could be used both for deposits and withdrawals, just like normal bank accounts.