On June 11, the Congressional Fintech Working Group held a hearing to examine FedAccounts and the digital dollar as ways to expand financial inclusion in the United States.
Particularly after the delays in the USD 1,200 stimulus payments directly to US citizens, the digital dollar has received much more attention. A series of bills appeared in the wake of the CARES Act that called for federal accounts and digital dollars as a way to streamline aid distribution.
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Updating financial tools as a public good
Morgan Ricks, a law professor at Vanderbilt University who recently spoke to Cointelegraph about the digital dollar, said at today’s hearing, „The money and payment system is a public good. It’s a critical public infrastructure, similar to roads.
The co-founder of the Digital Dollar Project and former president of the CFTC, J. Christopher Giancarlo, similarly compared the current system to the bridges of the past century that are now in disrepair: „Unless we act, this coming wave of innovation will put enormous pressure on our old financial system.
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Giancarlo told Cointelegraph before today’s hearing.
„I think the immediate sense of urgency has passed and I think it provides the time to reflect on the important issue: what the crisis revealed about the shortcomings in our account-based banking system when it comes to benefit sharing and inclusion. I think crises always reveal different things.
Financial inclusion beyond aid
In her opening remarks, Mehrsa Baradaran, a professor at the University of California, Irvine, School of Law, said: „While this recession is likely to exacerbate these problems, the gaps in our exclusionary payments system are not new. Baradaran similarly noted that many Americans are already using, for example, post offices as a means to avoid limited access to banks and check services.
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„No family should go hungry because they simply don’t have a bank account,“ agreed working group chair Stephen Lynch (D-MA).
Senior Financial Services Committee member Patrick McHenry (R-NC) asked Giancarlo to explain what digital dollars have to do with financial inclusion, to which Giancarlo responded: „It’s about the gateways to the financial system and making them as simple and accessible as possible.
Financial Services Committee Chairman Maxine Waters (D-CA), who is the author of a bill that was the focus of today’s discussion, summarized the dilemma:
„Nearly 35 million people have received paper checks, not direct deposits into their bank accounts. However, I am concerned that people who are likely to need stimulus payments may not even be able to deposit a paper check. …] Bitcoin Lifestyle companies are entering the unbanked space by marketing digital wallets as simple alternatives to bank accounts for US consumers.