Bill Overview
Title: No Digital Dollar Act
Description: This bill prohibits the use of a central bank digital currency as legal tender. Further, if a central bank digital currency is issued, (1) the Federal Reserve Board must continue issuing Federal Reserve notes, and (1) the Department of the Treasury must continue minting and issuing coins.
Sponsors: Sen. Lankford, James [R-OK]
Target Audience
Population: All individuals globally engaging in economic activities involving the U.S. dollar directly or indirectly
Estimated Size: 334000000
- A central bank digital currency could potentially impact all residents of a country as it would become a common form of legal tender.
- The prohibition of a digital dollar affects anyone who engages in financial transactions.
- Because the prohibition is on a potential U.S. central bank digital currency, the target population would be primarily the citizens and residents of the United States.
- While the U.S. is the primary focus, the influence of the U.S. dollar in global markets means international stakeholders may also be impacted.
Reasoning
- The policy of prohibiting a digital dollar directly affects anyone who engages in transactions as it pertains to the medium of transaction - currency. While not everyone may immediately understand or feel the effects, over time, it's likely to influence different aspects of life and business.
- The majority of the U.S. populace (approximately 334 million people) would likely continue to engage in transactions using traditional currency forms, maintaining habits and infrastructures established over decades. Thus, the policy could initially have a 'none' to 'low' impact on everyday experiences concerning usage of money.
- The economic identifiers most susceptible to changes would be businesses directly involved in digital payments and financial technology, but due to the scale and budget limitations, the immediate and major impacts are expected to be minimal in the first years.
- Interviews reflect that different people, depending on age, economic engagement, and technologic adaptation levels, would perceive and experience the policy's impact differently.
Simulated Interviews
Tech Entrepreneur (Los Angeles, CA)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- The ban makes it hard to innovate in financial technologies.
- Still confident about the startup but see challenges due to regulatory restrictions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 5 | 8 |
| Year 3 | 5 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 9 |
| Year 20 | 7 | 9 |
Farmer (Boise, ID)
Age: 58 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I prefer sticking to cash and basic banks, so this won't affect me much.
- I'm relieved, more options mean more confusion.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
College Student (New York, NY)
Age: 24 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 7/20
Statement of Opinion:
- Digital currency could have been a step forward.
- I think we're losing a chance to innovate.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 9 |
| Year 3 | 8 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 10 | 10 |
Small Business Owner (Houston, TX)
Age: 40 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- Traditional currency works just fine for my small business.
- Avoiding digital shifts makes sense to reduce complexity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Cryptocurrency Trader (San Francisco, CA)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- Limiting digital currency is regressive.
- Still many opportunities even if the digital dollar is not included.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 5 | 8 |
| Year 3 | 7 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Retired School Teacher (Miami, FL)
Age: 66 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 9/20
Statement of Opinion:
- I'm more comfortable with cash, so it's good to stick with what we know.
- Digital currency seems unnecessary to me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Financial Analyst (Chicago, IL)
Age: 31 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 4.0 years
Commonness: 5/20
Statement of Opinion:
- Though a missed opportunity digitally, conventional currency stability is key.
- Innovation may slow, but client preferences guide where we go next.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 9 |
University Professor (Boston, MA)
Age: 45 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 6/20
Statement of Opinion:
- Interesting to see how currency evolves.
- Access to traditional forms keeps economy stable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 10 |
Software Developer (Seattle, WA)
Age: 22 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 1.5 years
Commonness: 8/20
Statement of Opinion:
- The prospect of having a digital dollar was exciting and futuristic.
- Potential regulations are good in avoiding systemic risks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 10 |
| Year 10 | 10 | 10 |
| Year 20 | 10 | 10 |
Banker (Atlanta, GA)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 7/20
Statement of Opinion:
- Stabilizes our client transactions using known currencies.
- It alleviates potential uncertainties banks would face.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Cost Estimates
Year 1: $100000000 (Low: $50000000, High: $300000000)
Year 2: $100000000 (Low: $50000000, High: $300000000)
Year 3: $100000000 (Low: $50000000, High: $300000000)
Year 5: $100000000 (Low: $50000000, High: $300000000)
Year 10: $100000000 (Low: $50000000, High: $300000000)
Year 100: $100000000 (Low: $50000000, High: $300000000)
Key Considerations
- The bill's costs are primarily opportunity costs, stemming from not engaging with digital currency's potential advantages.
- Transition costs to digital currency are preemptively avoided, but future competitive disadvantages may arise.
- Maintaining the current cash system has predictable costs but lacks modernization efficiencies.