Last year, amid the Covid-19 pandemic, a new term entered into the space called a digital dollar during the CARES Act negotiations in Congress. The idea immediately drew attention as it represented both the notion of a U.S. central bank digital currency as well as a faster, more efficient, and safer way to distribute an economic stimulus while practicing good social distancing.
The term ‘digital dollar’ was coined by J. Christopher Giancarlo, Senior Counsel at Willkie Farr and Gallagher and former Chairman of the U.S. Commodity Futures Trading Commission. Giancarlo announced the Digital Dollar Project as reported by the Wall Street Journal in January of 2020. Prior to this, Giancarlo had been a strong supporter of the cryptocurrency space and blockchain entrepreneurs during his tenure at the CBDC, earning the nickname ‘CryptoDad’ on Twitter.
Giancarlo has been advocating why it is critical for the world that the Digital Dollar be created in what he describes as pilot programs similar to the Space Race, with our primary competitor being China who has been working on its own version of a CBDC for some time. However, advocacy in Washington sometimes requires a bit of luck and for the pieces on the Chess board to be placed just so to see the acceleration of an idea move from a think tank to the world stage.
It appeared comments from U.S. Treasury Secretary Janet Yellen yesterday with the New York Times NYT -0.6% on a digital dollar sparked a question during a hearing today by Federal Reserve Chair Jerome Powell today. With Yellen having formerly been the Chair of the Federal Reserve, she may be perfectly placed to discuss how the introduction of a digital dollar issued by the Federal Reserve would work in coordination with Treasury.