The Digital Dollar
In this article we will go over what is a digital dollar? The digital dollar is a project issued by the Digital Dollar Foundation and has a partnership with Accenture, (NYSE: ACN) a leading global professional services company. The Digital Dollar’s mission is not to replace the physical cash but improve the global financial systems with transactions. The Digital Dollar Foundation is a non-profit foundation created by the former Chair of the Commodity Futures Trading Commission (CFTC) J. Christopher Giancarlo and Accenture (NYSE: ACN).
The Digital Dollar project will explore many plans for a Central Bank Digital Currency with a deliberative process. It will include meetings with stakeholders, discussions, and open forums headed by J. Christopher Giancarlo a former chair of the Commodity Futures Trading Commission (CFTC). The Digital Dollar project has been reignited recently with the announcement of Libra by Facebook and the discussed plan of “Digital Euro”, by the European Central Bank (ECB) and some of the major European countries as United Kingdom, France, Netherlands, Sweden, and more.
Digital Dollar Program
With the coronavirus crisis, many governments in the world are taking measures to help its citizens with bills. United States Congress approved an emergency bill of $2.2 trillion to help US citizens during this economic crisis. House of Democrats submitted a draft with mentions of creating a Digital Dollar currency that would help by sending stimulus payments to the citizens who have not provided Bank accounts to Internet Revenue Service.
The Digital Dollar idea also was brought up in an independent Senate bill presented by Senator Sherrod Brown (D-Ohio), the ranking member on the Committee for Banking, Housing, and Urban Affairs. The former chairman of the Commodity Futures Trading Commission, J. Christopher Giancarlo founded the Digital Dollar foundation in January 2020 with its mission to promote the need for a Digital Dollar. Giancarlo’s idea is to create a Digital Dollar on a Blockchain network based on a Central Bank Digital Currency.
Giancarlo said that with the technology the digital dollar currency would bring advantages for people with security and privacy. In a Wall Street Journal, Giancarlo said: “We propose a digital dollar a government-sanctioned blockchain protocol, created and maintained by an independent nongovernmental group but administered by banks and other trusted payment organizations.” According to Giancarlo focusing on decentralization is the key to compete with other cryptocurrencies like Bitcoin, Libra project started by Facebook, and China government preparing to create a “Digital Yuan”.
Benefits of the Digital Dollar
Digital Dollar project would improve the payment ecosystem with digital payment transactions. With payment transaction completed much faster and with cheap transaction fees of payments. It would not need the consumer to pay for maintenance fees and it would not require the consumer to have a minimum balance.
The project will facilitate payments and collaborate with the private and public sectors to leverage technological progressions. By using the digital dollar for payments, it could benefit in cases of large sums that need to be transferred within banks or people. It would offer international payments digitalized and enhance the global payments competition.
It would make tax avoidance and tax evasion much more difficult since it would become more difficult to avoid taxes with methods as foreign banking and unreported employment to hide financial activity from the authorities. The digital dollar would offer bank competitions with free maintenance of accounts, lower cost of transaction fees, and much faster payment than the bank system. Crime activities would be much easier to spot with financial activity by tracking laundering money criminals and refunding money to the victims for scam cases.
Digital Dollar Challenges
There are some challenges associated with the digital dollar program and many banks are skeptical and unsure about this whole project. The financial situation is one of the main concerns of the bank as it would offer much more competition to the banks. There are other concerns such as security and the privacy of the consumers online. Fraudulence activities such as accounts and funds stolen and other criminal schemes as money laundering are some major points for the digital dollar project.
Vitalik Buterin, the founder of the cryptocurrency Ethereum, on a podcast produced by Keiran Harris, expressed concerns about the security. the privacy aspect of the digital currencies: “The main challenge with the central bank and even corporate currency is basically the concentration of power, the concentration or data collection that you become dependent on potential central intermediaries that can exercise a very fine-grained degree of control over who has the ability to take part in these systems and who can’t.”
J. Christopher Giancarlo
The Digital Dollar Foundation headed by the J. Christopher Giancarlo is a Senior Counsel to the law firm Willkie Farr & Gallagher and a former Chairman of the U.S. Commodity Futures Trading Commission (CFTC). Mr. Giancarlo also worked as a member of the Financial Stability Oversight Committee (FSOC), the President’s Working Group on Financial Markets, and the Executive Board of the International Organization of Securities Commissions (IOSCO). He is also the Chairman of the Board of Common Securitization Solutions, Inc. Under his leadership, the CFTC published primers on virtual currencies and smart contracts, oversaw the launch of the first bitcoin futures contracts, and created LabCFTC as the agency’s stakeholder in the digital evolution of derivatives trading markets.
Charles (“Charlie”) H. Giancarlo is an investor, entrepreneur, and executive director. He is currently the Chief Executive Officer of Pure Storage (NYSE: PSTG). He before worked in senior executive roles at Cisco Systems (Nasdaq: CSCO) and Silver Lake Partners, the private equity firm. Giancarlo earned a bachelor’s degree in electrical engineering from Brown University in 1979. He also earned master’s degrees in electrical engineering and business administration from UC Berkeley and Harvard University.
The digital dollar foundation includes other advisory members such as Cuy Sheffield, Head of Cryptocurrency at Visa and Jesse McWaters, VP of Global Digital Public Policy at Mastercard. Ex-government representatives include Sigal Mandelker, former Under Secretary of the Treasury for Terrorism and Financial Intelligence, and Mike Piwowar, the former commissioner of the U.S. Securities and Exchange Commission.
Daniel Gorfine is the Founder and CEO of Gattaca Horizons LLC and Adjunct Professor of Law at the Georgetown University Law Center teaching FinTech Law & Policy. He has previously served on the CFTC’s first Chief Innovation Officer and Director of LabCFTC. Before the CFTC, Gorfine was Vice President, External Affairs & Associate General Counsel at OnDeck. A graduate of Brown University (A.B.), Gorfine holds a J.D. from the George Washington University Law School and an M.A. from the Paul H. Nitze School for Advanced International Studies (SAIS) at Johns Hopkins University.
Dave Treat is a Senior Managing Director, co-Lead of Accenture’s Blockchain Business, and Accenture Lead of the NY Fintech Innovation Lab. David has over 20 years of experience in Financial Services roles spanning Capital Markets, Retail Banking, and Cards. He serves on the Board of Directors for the Linux Hyperledger Project, Enterprise Ethereum Alliance, Global Blockchain Business Council and the ID2020 Alliance, is a member of the World Economic Forum C4IR Global Blockchain Council and is a program advisor for the Chamber of Digital Commerce. David also serves as the Program Advisor for the World Economic Forum’s Digital Identity Initiative and the Known Traveller Digital Identity project.
The digital dollar project can be a new era of a new revolution in the history of technology and finance payments. President Donald Trump nominee Judy Shelton, to the Federal Reserve Board of Governors. she spoke about the digital dollar project on an interview saying that we do not need the digital currency and we should focus on the physical cash dollar. He said, “We need the digital currency a little bit less I would argue internally, but rather to help preserve the primacy of the dollar worldwide.”
In an interview, Steven Mnuchin serving as Treasury Secretary stated that the Federal Reserve System (Fed) does not plan to create a new digital currency within the next five years and we don’t need it at the moment, he said.
Giancarlo has also stated that any implementation of the digital dollar will need to be carefully considered, on an interview with CoinTelegraph he said: “The United States has to proceed thoughtfully, intelligently, deliberately. We advocate pilot programs as a way to explore the use of the digital dollar and how it can be used, including how it can be used in a crisis. But I think one needs to be very cautious about trying to launch something as big as this amidst a crisis.”
In the next two months, the Digital Dollar Project will publish a white paper discussing the value proposition of a digital dollar.
However, with the cryptocurrency becoming more popular the need for competing with the cryptocurrency world has become more searchable. China is a top contender to make the first fully digital currency launching the “Digital Yuan” with the Central Bank Digital Currency (CBDC).
Other major European countries have discussed the project of a “Digital Euro” with European Central Bank (ECB). And with the recent interest of Canada on “Digital Canadian Dollar”, we may see in the upcoming years implementation of digital currencies in the United States and other countries. We hope you enjoyed this article explain what is a digital dollar. If you wanted to read more about digital currency we also go over the digital yuan and digital euro.
JHVEPhoto / Shutterstock.com Writer Behar H.