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<\/div>\nDigital dollar advocates told a U.S. Senate committee on Tuesday (June 30) that electronic currencies could help consumers. However, committee Chairman Mike Crapo (R-Idaho) said the sector needs “rules of the road,” while ranking Democratic member Sen. Sherrod Brown (D-Ohio) asked, “Why on earth would we trust big tech with our banking system?”<\/p>\n
“Big Tech companies have made a lot of big promises about the better society they were going to allow us to build, [but] they have not lived up to them,” Brown told a Senate Banking, Housing and Urban Affairs Committee virtual hearing<\/a> on the digitization of money and payments. “[There] are problems we need to tackle — but I’m skeptical financial technology firms will solve them. Given these companies’ record, it seems more likely they’ll only make the problems worse.”<\/p>\n However, several experts spoke out in favor of creating a digital dollar<\/a> — an electronic credit that would only exist on computers, but which consumers and businesses could use to pay one another like a physical dollar.<\/p>\n Christopher Giancarlo, former chairman of the U.S. Commodity Futures Trading Commission and founder of the Digital Dollar Project, said in prepared remarks that America’s financial infrastructure has fallen behind. After all, it takes days to settle retail bank transfers.<\/p>\n And as has been widely reported, it took weeks for millions of Americans to receive their paper COVID-19 stimulus checks. But Giancarlo said a digital U.S. dollar would offer a seamless way to integrate with existing banking and payment functions, distributing funds to digital wallets. He said that for consumers with no bank accounts, such digital wallets could com pre-loaded on mobile phones.<\/p>\n Giancarlo also said China’s efforts to build a digital yuan threaten to undermine the dollar’s dominance in global commerce. He said a similar U.S. effort would “future proof” the greenback.<\/p>\n Nakita Cuttino, a visiting assistant law professor at Duke University School of Law, said the current U.S. banking system’s access and timing frictions particularly hurt low-income Americans. She said that for those who live paycheck to paycheck, payment delays cost tens of billions of dollars annually. Cuttino noted that things like early wage programs can come with high transfer fees, and said markets have generally not solved the problem of financial inclusion.<\/p>\n Charles Cascarilla, CEO and co-founder of stablecoin company Paxos, said stablecoins and digital central-bank currencies are “critical” for financial infrastructure. He said such a system can reduce intermediaries between the Federal Reserve and consumers.<\/p>\n Sen. Crapo, the committee chairman, said the COVID-19 pandemic has forced a digital shift that requires a re-examination of issues of financial inclusion.<\/p>\n He said new digital offerings such as digital wallets and mobile money transfers have made electronic transactions more widely available, but “often, these services are layered on top of traditional payment rails and rely on core nonbank payment systems as means of settlement.”<\/p>\n Crapo noted that cryptos have claimed to deliver payments quickly, globally and with some anonymity. But the rise of Facebook’s Libra cryptocurrency and other stablecoins have shown some concerns over risks to the financial system’s stability.<\/p>\n He called innovations like a digital dollar and stablecoins “inevitable, beneficial, and the U.S. should lead in their development.” But he added that “there are legitimate questions about certain stablecoins and digital currencies more broadly, such as the degree of oversight, impact on the transmission of monetary policy and disruption of banks’ traditional financial intermediation.”<\/p>\n Sen. Brown touted his proposed Banking for All Act as a partial alternative. The measure would allow all Americans to open fee-free bank accounts at U.S. post offices, banks or online and hook directly into the Federal Reserve’s system.<\/p>\n “Banking for All means no more check cashing fees, no more paying to use the money you already earned [and] no more waiting until Wednesday to use money you were paid on Friday,” Brown said. However, he added that technologies like a digital dollar “can help make this a valuable tool for everyone.”<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n Tags:<\/b> Pymnts <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"See Campaign: <\/strong>https:\/\/www.banking.senate.gov\/hearings\/the-digitization-of-money-and-payments<\/a>
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Digital dollar advocates told a U.S. Senate committee on Tuesday (June 30) that electronic currencies could help consumers. However, committee Chairman Mike Crapo (R-Idaho) said the sector needs “rules of the road,” while ranking Democratic member Sen. Sherrod Brown (D-Ohio) asked, “Why on earth would we trust big tech with our banking system?” “Big Tech … Continue reading US Senate Committee Weighs Pros And Cons Of Digital Dollar<\/span><\/a> Continue Reading