That federal emergency stimulus check could be delivered to Americans through a new digital wallet maintained by your friendly neighborhood Federal Reserve member bank.
As part of a counterproposal to the $2 trillion stimulus bill proposed by Republicans, blocked for the second time Monday, House Democrats have proposed that the Fed make payments to people in “digital dollars” through “digital dollar wallets” which could be opened at various financial institutions. The hope is that it would ensure that everyone eligible receives a check, whether or not they have a bank account, and that they get it quickly.
A separate proposal by the House Financial Services Committee includes the same idea. Both proposals, dated March 22, describe digital dollars as electronic units of value expressed in dollars that can be redeemed at an eligible financial institution (a member bank of the Board of Governors of the Federal Reserve System). The same banks could also maintain “pass-through digital dollar wallets,” which would allow recipients “a pro rata share of a pooled reserve balance” held by the bank.
If passed, banks would have to make the wallets available to U.S. citizens, legal permanent residents and business entities by January 1, 2021. If there isn’t “sufficient information to make direct deposit payments” to the individual, they would be paid by check.
It’s unclear how likely it is that this proposal will see the light of day in a Republican-controlled Senate; although in Facebook’s Libra hearings on Capitol Hill last year Republicans showed they’re generally more open to digital currency ideas than Democrats (who understandably couldn’t get past Facebook’s then-leadership in the project, many Republicans felt the same way).
Michigan Democratic Congresswoman Rashida Tlaib also proposed a digital payout in her Automatic BOOST to Communities Act over the weekend. Tlaib is proposing every person in America receive a pre-loaded debit card that can be automatically re-upped each month “until one year after the end of the Coronavirus crisis.” In the long term, under the draft bill, debit and credit card infrastructure would eventually be converted into "a permanent, Treasury administered digital public currency wallet system.”
Central bank digital currencies have been a hot topic among central banks since the introduction of the Facebook-led digital currency project Libra last summer, which "really lit a fire” under the development of a digital dollar, Fed Chair Jerome Powell said Feb. 20 in a House Financial Services Committee meeting. Libra was, to many lawmakers, a threat to the U.S. dollar and sovereign currencies globally; it also gave China the impetus to create and deploy its digital yuan, which signaled the very beginning of a global digital money war against the dollar at the end of last year.
Powell did, however, take a wait-and-see attitude as to whether the Fed would actually ever issue a digital dollar at that meeting (which was before coronavirus). Former Commodity Futures Trading Commission J. Christopher Giancarlo and economist Judy Shelton, Trump’s nominee for the Federal Reserve Board of Governors, have both recently said the dollar could lose its global dominance if the U.S. doesn’t digitize it.
Many U.S. consumers say they’ve noticed higher than usual prices for holiday gifts in recent months, according to a a December poll from The Associated Press-NORC Center for Public Affairs Research. A contributing factor is the unusually high import taxes the Trump administration put on foreign goods. While the worst-case consumer impact that many economists foresaw from the administration’s trade policies hasn’t materialized, some popular gift items have been affected more than others. Most toys and electronics sold in the U.S. come from China. So do most holiday decorations. Jewelry prices have risen due to the cost of gold.
Serbia’s prosecutor for organized crime has charged a government minister and three others with abuse of position and falsifying of documents related to a luxury real estate project linked to U.S. President Donald Trump’s son-in-law Jared Kushner. The charges came on Monday. The investigation centers on a controversy over a a bombed-out military complex in central Belgrade that was a protected cultural heritage zone but that is facing redevelopment as a luxury compound by a company linked to Kushner. The $500 million proposal to build a high-rise hotel, offices and shops at the site has met fierce opposition from experts at home and abroad. Selakovic and others allegedly illegally lifted the protection status for the site by falsifying documentation.
President Donald Trump has signed an executive order to block states from regulating artificial intelligence. He argues that heavy regulations could stifle the industry, especially given competition from China. Trump says the U.S. needs a unified approach to AI regulation to avoid complications from state-by-state rules. The order directs the administration to draw up a list of problematic regulations for the Attorney General to challenge. States with laws could lose access to broadband funding, according to the text of the order. Some states have already passed AI laws focusing on transparency and limiting data collection.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
House Republicans in key battleground districts are working to contain the political fallout expected when thousands of their constituents face higher bills for health insurance coverage obtained through the Affordable Care Act. For a critical sliver of the GOP majority, the impending expiration of the enhanced premium tax credits after Dec. 31 could be a major political liability as they potentially face midterm headwinds in a 2026 election critical to President Donald Trump’s agenda. For Democrats, the party’s strategy for capturing the House majority revolves around pinning higher bills for groceries, health insurance and utilities on Republicans.
