There are reports that a few in the United States House of Representatives wanted to create digital wallets in the coronavirus stimulus package.
This, of course, caused many in the crypto world to jump off the deep end.
After all, what is going to happen to Bitcoin and other decentralized cryptocurrencies if the U.S. government has a digital dollar?
The answer is nothing. All will remain as it is.
Let us be clear here, nothing they are proposing is a threat to decentralized cryptocurrencies.
To start, the USD is most digital as it is. We know that few people use physical cash. Almost all transactions are in digital form putting the USD in a digital state already.
At the same time, digital wallets are a couple decades old. What do people think PayPal is? It is nothing more than a digital wallet that allows for the storing, sending, and receiving of fiat currencies.
The only thing a digital dollar will do is centralize fiat based transactions. Under this scenario, the United States government will likely eliminate the competition such as PayPal and other financial service providers.
In fact, this will likely make decentralized cryptocurrencies more attractive. Who wants a centralized, government run banking system?
The other factor about the proposed bill by the House members is that it has nothing to do with blockchain. Without this feature, the currency is still under the same premise as it is now. The rapid expansion and contraction of the currency is still possible.
What cryptocurrency advocated need to be mindful of is banning of cryptocurrencies by governments around the world. This is why expansion of users is vital. If there are enough people using them and enjoying the benefits, it really will not matter what governments do.
In this instance, the government's lack of understanding (or caring) is working in our favor.
Some good points.. thanks for sharing to stem the panic..
I always find it interesting that some democratic governments are purportedly for freedom while usually being focussed on control..