Cryptocurrency

Bitcoin Gets Competition? – The US Congress plans to digital dollars

In the year, published in 2008 by Satoshi Nakamoto, the legendary white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. The white paper was (and is) a response to the then financial crisis and the associated economic dislocations. 12 years later, we are again faced with a recession. The response of the Central banks is similar: a further increase in the money supply. The second keyword is helicopter money. And to spread this now more effective, has proposed to the US Congress (house of representatives) a digital Dollar.We want to understand in this article, what is the impact of a digital Dollar would have on Bitcoin. A competitor to BTC would be created thereby, or the digitization of the dollar would be a catalyst for the Bitcoin exchange rate? – The theme is exciting, and that is why we go directly.

A clear Trend towards cashless payments

The digitisation of a currency initially brings a lot of advantages from the point of view of the Issuer: the production cost is reduced, the velocity of circulation rises, most likely, and, above all, the cash flow can be better controlled. Also from the point of view of the consumers, there are advantages: there are no coin-operated tide more in your wallet and you pay also suitable.For these benefits, it is, however, a Central aspect of freedom and anonymity. After all, who pays cash, must be sure that only he and his To know was what are some uses for the money. Even if it may sound banal, many citizens of this world, but comfort over freedom and anonymity.And so we see, for example, in the graphic below, that just in the United States and Canada, the topic of ‘cashless payment’ is extremely popular:there are countless other statistics that demonstrate that even here in Germany, the Trend of cashless payment and mobile Payments is growing strongly. The message behind it is: Even the Germans, who are considered friends of cash, grab more and more to the credit card or is already organised. But now we come back to the Digital dollars.

Digital US Dollar vs. Bitcoin: a Stimulus for the economy?

No matter if we find it annoying or not – the dominant theme of the current days is the Coronavirus and its impact on health and the economy. So the Virus didn’t cost life to date, only countless people, but also the economic tremors.In the USA, money has been, therefore, already massive guns: from a tax deferral on infinite liquidity to the Helicopter, in order to boost consumption. But how to distribute the helicopter money now best? In the Form of a check or would you prefer digital?Exactly this question to the members of the house of representatives of the US Congress. The Democrats have made a proposal, in which each citizen a ‘digital Wallet’, then a ‘digital Dollar’ can be stored.

What defines a digital dollars, anyway?

We take a look at the way in which a digital Dollar was defined. Click the following Link to the original document: click you can find the Rest of me. In order to save you time, we look together to the Definition.A digital Dollar as a credit (engl has been defined. balance), which is expressed as a dollar value and as a digital entry in a Ledger exists, or an electronic unit of Value (engl. unit of value), redeemable at a selected financial institution will be the idea behind it follows, of course, the Plan for the Stimulation of the Economy. By a digital System, the helicopter money is much easy to distribute in the Form of Checks. Bloomberg wrote:

The Central Bank, the FED, and other major financial institutions will provide your customers with digital Wallets available, to provide you with the direct aid of the government, which are currently being negotiated.

Within the Bitcoin Community, scepticism about such a project was, of course, already wide. So the alleged ‘crypto-currency has been referred to already as a CBDC, so digital currency is the Central Bank.

Digital Dollar as a catalyst or a competitor to Bitcoin?

Now the question is, what impact might a Digital Dollar to Bitcoin us, of course. Would the digital Dollar is a serious competition for Bitcoin, or he would play with BTC even in the cards? – To answer this question, let’s look at the opinion of Nathaniel Whittemore.Whittemore is as a crypto analyst and represents an interesting opinion. He describes a scenario which could happen, once it actually comes to the use of digital Dollars. The scenario consists of four steps and is ultimately bullish for Bitcoin:The Digital Dollar is introduced in order to stimulate the American economy and to make digital payments easier.Millions of Americans receive this (for the first time) access to a digital Wallet. You will get to know the term and understand what is hidden behind it.The unlimited liquidity to the Federal Reserve, leads to a massive flood of money. The result is an increase in the rate of inflation and thus at the same time devaluation of the purchasing power of the dollar. In short: the US citizens are insidiously devalues poorer, and your assets.Looking for a digital Alternative, when the Inflation is low and the loss in value can be stopped, bumping into some of citizens on an interesting answer: Bitcoin.Here you can see the Tweet in the Original:

How realistic but such a scenario would be? – Basically, everything stands or falls with the introduction of the digital Dollars. Of course, the economic measures could also be carried out via Cheques. I personally believe, however, that the U.S. government is looking for a fast and effective measure that you can distribute not only the money, but also at the same time even more control receives. The subsequent steps (further increase in the money supply, and thus loss of purchasing power) would be the logical consequences. Bitcoin could be as big profiteer of the current Situation.

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About the author

Eve Manning

Eve Manning

A native Texan, Eve first started out as a Finance Analyst and later realized that her true passion was not in trading but in writing. She leverages her experience in the Finance industry to analyse and write in-depth news articles covering the Cryptocurrencies, Economy & Finance industries.