Ben Bartlett recently tweeted that there are people who are still waiting for aid payments. He added it is time for a free digital alternative.
Due to unsatisfactorily slow COVID-19 stimulus payments, Congress opens their ears to testimony on using digital dollars. It is to advance the United State’s legacy financial infrastructure.
The Congressional Fintech Task Force held a virtual hearing on June 11. Its purpose was to examine FedAccounts and a digital dollar as a means of expanding inclusion in the United States. The digital dollar attracted more attention especially after a great delay of $1200 stimulus payments directly to U.S. citizens.
Upgrading financial stools as a public good
Morgan Ricks, a law professor at Vanderbilt University said on the hearing: “The system of good money and payments is a public good. It is critical public infrastructure, akin to highways.”
Chairman J. Christopher Giancarlo, former CFTC and Co-founder of the Digital Dollar Project compared the current system to bridges of the last century. They said that less we act, this coming wave of innovation will put enormous strain on the aged financial system.
Financial inclusion beyond aid
Mehrsa Baradaran, a professor at UC Irvine’s law school said in her opening remarks that though this recession is likely to make these problems more acute, the gaps in our exclusionary payments system are not foreign. She also said that many Americans are using post offices as a means of working around confined access to banks and checking services.
Taskforce Chairman Stephen Lynch agreed: “No family should have to experience hunger simply because they don’t have a bank account.”
Patrick McHenry, Ranking Member of the Financial Services Committee asked Giancarlo to elaborate on what digital dollars have to do with financial inclusion. He responded that it’s bout on-ramps into the financial system and making them as simple and accessible as possible.
Summary of the quandary
The author of a bill in the discussion, Chairwoman of the Financial Services Committee Maxine Waters, summarized its predicament. According to her, nearly 35 million people received paper checks, not direct deposits to their bank accounts. However, she was concerned that the people who most likely need stimulus payments may not even be able to deposit a paper check. She further stated that Fintech companies are stepping into the unbanked space by marketing digital wallets as low-barrier alternatives to bank accounts for U.S. consumers.
Financial Services Committee and Crypto
Oftentimes, it is the Fintech Task Force who’s the tip of the spear in how Congress interacts with crypto. For instance, the fate of Facebook’s libra. It is within the House Financial Services Committee in which members of which are currently critical to deciding.
In fact, it was Chairwoman Waters who initially called on Facebook to freeze the project just under a year ago. As a result, there was a radical expansion of congressional interest in crypto as a whole.