Opinion: sooner or later digital dollars, U.S. citizens' privacy may be violated
The world is on the verge of a huge economic crisis. In a difficult environment full of uncertainty, the United States is doing everything in its power to try to save the current monetary and financial system. The Federal Reserve has taken the first step, announcing a large-scale quantitative easing plan, and has injected $ 700 billion in liquidity by March 15, 2020.
Wall Street's non-purchase of the first monetary stimulus package has caused the Fed to change its pace. The Fed replaced the rocket launcher in its hands with a nuclear weapon. After only 8 days, the Federal Reserve announced on March 23, 2020 that it would begin to implement unlimited quantitative easing.
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You are right, the Fed is now ready to take any measures to protect the current system. Quantitatively, the size of this currency injection bill may exceed $ 6 trillion. This staggering number will immediately be added to the Fed's balance sheet.
The Federal Reserve's M2 currency stock may grow by 40% in a few weeks. From $ 150 trillion to $ 210 trillion. This increase will actually constitute an unprecedented currency devaluation of the US dollar.
It is worth mentioning that it took 10 years for the Federal Reserve's M2 currency stock to increase from $ 80 trillion to $ 150 trillion:
M2 currency stock evolution since 1985
With the economic crisis we are about to experience, the Federal Reserve M2 will achieve the same amount of growth in just a few weeks. Therefore, we are indeed facing a new grim situation.
All these measures decided by the Fed have one thing in common: they are all designed to rescue the current system by helping financial markets, banks and American companies.
In this context, many voices have emerged in the United States to explain that most people must not be forgotten in this economic crisis. When I talk about the majority, I am talking about the American people who are more worthy of help than financial markets or banks.
As a result, members of Congress have reflected on different assumptions that could trigger monetary stimulus in the U.S. population. First, many people are talking about whether it is possible to issue a check of at least $ 1,000 to every American without conducting a state of economic investigation.
Then, some other members of Congress proposed creating a digital dollar, while also creating a digital dollar wallet that would allow U.S. citizens to use their digital dollars.
Digital dollars will reach the largest number of people, accelerate monetary stimulus plan
This proposal has at least clear advantages. Politicians are showing their cards. Although the possibility of using digital currency was ruled out a few months ago, the current situation indicates that this solution has been considered for some time.
As part of a major monetary stimulus package for the entire US population, digital dollars will accelerate development.
Specifically, the government can provide a website where every U.S. citizen who wants to benefit from it can sign up. A U.S. citizen will provide the required identification and in a few days he or she will be authorized to install a digital dollar wallet on his smartphone.
For the US government, this solution is much cheaper than sending a check to every American. In addition, this scheme will be faster.
In the current situation, it is clear that swift action must be taken to maximize the impact of this monetary stimulus to revitalize the US economy.
Ultimately, digital dollars will give them more control over how and when to use the money.
Digital dollars will strengthen cashless society, but will also bring more surveillance
Naturally, American citizens would flood into digital dollars. However, this solution is not without many problems, especially with regard to the privacy of U.S. citizens. Digital dollars may mark a turning point in a cashless society promised to the future world.
U.S. authorities can more easily monitor Americans by using the currencies available in their digital wallet.
The government can track in more detail how everyone treats the money received as monetary stimulus. In addition, the shift to digital dollars will strengthen government power over property owned by US citizens. This will make it easier for them to arbitrarily block payments or confiscate personal funds.
I only mention the most obvious examples here, but these new possibilities will allow governments to significantly increase their control.
Digital dollars will be born sooner or later
At the time of writing, the White House and the United States Senate have finally reached a $ 2 trillion agreement to stimulate the US economy. This package includes a check for $ 1,200 per U.S. citizen.
At present, the idea of digital dollars seems to have been abandoned.
What I say for the time being is because I think the government must resolve this sooner or later. Obviously, the digitalization of digital currencies in the future is inevitable. Therefore, digital dollars are only a matter of time.
If this kind of monetary stimulus targeted at specific populations is not enough to revive the US economy, the idea of digital dollars may even appear much earlier than expected.
I think, as I explained at the beginning of this article, this idea has a positive impact on the US government. Still, digital dollars must be seen as a double-edged sword.
When promoting the use of digital currencies by Americans, the government must educate them on this topic to help them use digital currencies properly. By educating U.S. citizens on the use of digital dollars, authorities will run the risk that they will be interested in cryptocurrencies as their logical extension.
Digital dollars can accelerate bitcoin adoption
When people are interested in cryptocurrencies, they are first interested in the 99% time history of Bitcoin. After learning how to use digital dollars, American citizens may be tempted to discover Bitcoin.
The reason I bet this way is because I just don't think that digital dollars will correct the deficiencies in the dollars they use and the fiat currency system worldwide.
Regardless of whether it is digitized or not, the Fed will always have the ability to counter copy the US dollar. The US dollar is not a sound currency. The public will always suffer from the devaluation of the digital dollar.
Sooner or later, people who are disappointed with this fiat currency system will find an option that can better protect their property. After entering the digital currency world, they will find that Bitcoin is a logical extension of a significant difference: Bitcoin's monetary policy.
Bitcoin has a very clear monetary policy: the maximum supply is 21 million units, and over time, the inflation rate of newly created bitcoin will decrease to zero. Bitcoin's monetary policy is automatic and predictable. It is written in the Bitcoin source code itself.
In a future world where all currencies will be digitized, the difference will be in monetary policy. In this field, Bitcoin is the best.
Obviously, Bitcoin is the most reliable currency that can be found in the world today. This inherent feature will make Bitcoin more and more attractive in the coming years. People will choose to convert fiat money into reliable money to truly protect their wealth.
Both the US government and the Federal Reserve are aware of the main risks to their privileges. This is why there is no idea of retaining digital dollars for the time being.
In the face of the crisis we are experiencing, US authorities are still looking for the right solution to support the US economy and avoid an unprecedented recession. The idea of digital dollars with digital dollar wallets is back on the table.
This idea has at least one advantage, that is, in the uncertain circumstances we are experiencing, seeing politicians put this matter on the table. For the US government, such a solution is obviously a double-edged sword.
On the one hand, digital dollars can provide immediate monetary stimulus to Americans, while allowing authorities to better monitor the use of the money. On the other hand, this will give millions of Americans access to digital currency, and then they may be inclined to use Bitcoin.
Therefore, such a solution may accelerate the adoption of Bitcoin in the United States. Realizing this risk, the US government finally chose to check this solution, but the big question is whether this is enough to revive the US economy.
If not, the idea of digital dollars will definitely reappear. Sooner or later, it will be inevitable.
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