On Thursday this week, US House Financial Services Committee (FSC) conducted a virtual hearing titled “Inclusive Banking During a Pandemic: Using FedAccounts and Digital Tools to Improve Delivery of Stimulus Payments”. During the panel, Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission (CFTC), advocated for his Digital Dollar Project – as a convenient tool for getting COVID-19 stimulus funds to every U.S. resident.
“Nothing reveals the limits of our accounts-based financial system more strongly than the current COVID-19 pandemic, when tens of millions of Americans are waiting a month or more to receive payments by paperchecks,” he said, supported by other presenters in what they described as a situation where people in the US struggled while not being able to receive their stimulus payments.
Describing the project he now heads, Giancarlo compared it to SpaceX, Apollo and Gemini space missions:
“The exploration of the idea of the US CBDC through a series of pilot programs like the ones we used to explore space, and I think the similar approach should be taken here.”
Mehrsa Baradaran, a Professor of Law at the University of California Irvine School of Law, said:
“I’ve been shouting into the void of academic research about how our banking system leaves out some of our most vulnerable communities. The problem here is the banking deserts, it’s the unbanked and underbanked, and we have the technology to meet those people and I think that’s critical at this juncture.“
A tokenized dollar, Crypto Dad mentioned, could be a way to provide banking services to those who lack them. Focusing on providing mobile and broadband access and a tokenized dollar rather than an expansion of existing banking services, might attract more individuals to the new system, Giancarlo said: it “is about on-ramps into the financial system, and making them as simple and accessible as possible.”
“To be a truly permissionless digital cash a digital dollar must have the same attributes as physical cash. Anything less would simply create a new intermediary. And it could even be one offered by the government in competition with private financial institutions” Rep. Tom Emmer mentioned during the hearing.
The most prominent rival for US CBDC, the PBoC’s blockchain-based project of digital yuan, has fast-forwarded over the last several months. In April, screenshots of a wallet app for the digital RMB for various banks and payments providers leaked to the Internet. In May, Former People’s Bank of China president Li Lihui said that the launch of the digital yuan could indeed replace cash if critical conditions are met.