On Thursday, June 11, the Financial Services Committee’s (FSC) Task Force on Financial Technology held a virtual hearing on the subject of the digital dollar. A main topic of discussion was how digital money should be regulated to serve as a superior delivery vehicle during a crisis like the coronavirus pandemic.
FSC Hearing on Digital Dollar
It did not escape the public’s notice that, during the COVID-19 crisis, billionaires drastically increased their wealth by at least $565 billion. At the same, more than 42 million Americans have sought unemployment claims.
A regular person goes on with life without worrying about grand financial schemes. Why would they if they can’t afford the benefit of dozens of advisors and analysts? This is the domain of the ultra-wealthy, who on top of that hold a profound influence on political actors.
Moreover, as millions of Americans live from paycheck to paycheck, even temporary $1200 relief from the government becomes critical to maintain the increasingly fragile social stability. In light of this, House’s FSC Task Force on Financial Technology conducted a virtual hearing on the implementation of the digital dollar, which you can watch in its entirety here.
FedAccounts as an Alternative Mechanism to Introduce Digital Currency
Headed by Rep. Stephen Lynch (D-Mass.) and dubbed as “Inclusive Banking During a Pandemic: Using FedAccounts and Digital Tools to Improve Delivery of Stimulus Payments”, the virtual FSC session included J. Christopher Giancarlo as the main witness, a strong advocate for a token-based digital currency and founder of the Digital Dollar Foundation. He spoke from a position of authority as the former Commodity Futures Trading Commission (CFTC) chair.
In fact, Giancarlo’s foundation published the first white paper on the subject, extolling the urgent need for the US to adopt a digital dollar, lest be left behind by China’s equivalent project, and Facebook’s Libra, which has yet to see a launch date. The white paper also argues that there is no better time to implement the digital dollar than in the wake of COVID-19 economic turmoil.
Others advocated for a different approach, through FedAccounts. Instead of allowing only commercial banks to open an account at the Federal Reserve, retail customers should also have that privilege. The concept of FedAccounts was devised by professor Morgan Ricks, tenured at Vanderbilt Law school. His testimony countered Giancarlo’s more straightforward approach, alongside other witnesses from Electronics Association – Jodie Kelly, and the University of California, Irvine – professor Mehrsa Baradaran.
Which approach would best serve the American people, token-based or account-based digital dollar? We want to know what you think in the comments section below.