Currently just a flashy idea, the digital dollar is competing with more prosaic but proven 20th-century methods for the job of getting stimulus funds to every U.S. resident.
That’s the takeaway from Thursday’s House Financial Services Committee (FSC) hearing, where witnesses advocated different solutions to the problem.
Making the case for an electronic greenback was J. Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission (CFTC), now a director with the Digital Dollar Project.
As he has in the past, he argued tokenization is a way to future-proof the dollar. Other countries, including China, are working to digitize their currencies, he noted. If the U.S. wants to maintain its leadership role in the global financial system, it too should take on this task, he told lawmakers.
While Giancarlo previously cautioned a digital dollar should not be “cobbled together” during a crisis, he suggested at the hearing that laying the groundwork should be part of the response to the downturn caused by COVID-19.
“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.
“We need to start exploring the next level of technology side by side with the existing accounts-based technology, if for nothing else to build greater redundancies in the system but also greater optionality and more tools in our toolbox to use in crises like this,” he added.
But other witnesses kept the focus on the urgency of making stimulus payments quickly to those in need. One round of paper checks has gone out to individuals who filed taxes in the last two years, but many are still waiting for their stimulus dollars.
“The point I just wanted to drive home [is] we are still in the midst of a crisis and [as] others on the panel said really eloquently, people are suffering today,” said…