The Senate Banking Committee discusses the blockchain-based digital dollar

The Senate Banking Committee held a second hearing on how a blockchain-based US dollar could be created and regulated. Yesterday’s hearing focused on a number of issues that should be addressed if a digital USD were to be created. In this context, a “digital dollar” refers to a blockchain-based US currency, since all major fiat currencies are digitally accessible. The U.S. Federal Reserve has expanded its balance sheet from less than $ 4 trillion to over $ 7 trillion since early 2020. because it printed more dollars. This process is impossible with digital currencies like Bitcoin.

 

Stablecoins in debate

In a second hearing, the Senate also discussed stablecoins. With all the volatility on the crypto markets, stablecoins like Tether have become extremely popular. Tether (USDT) has the third highest market cap for all tokens after Bitcoin and Ethereum.

 

The digital dollar will not be like Bitcoin

The type of blockchain-based currency discussed by the Banking Committee doesn’t seem to share much with Bitcoin or other decentralized tokens. There are no fixed guidelines for how a blockchain-based US dollar works. However, it appears to be behaving like a fiat currency captured in a government-controlled blockchain. China has made progress on the blockchain-based but not decentralized digital yuan. China’s central bank (PBoC) has full control over the digital yuan and can use information from the transactions for whatever it chooses. Many people who originally introduced digital currencies like Bitcoin were of its anonymity and the fact that it lacked government participation. Government-sponsored tokens may not find the same support, although it remains to be seen.