There were negotiations over different solutions at Thursday’s House Financial Services Committee (FSC) hearing. J. Christopher Giancarlo, director with the Digital Dollar Project, told tokenization is a way to future-proof the dollar. Several countries in the world have been trying to digitize their currencies.
Previously Giancarlo suggested that a digital dollar should not be cobbled together during a crisis at the hearing. The man suggested America that if it wants to retain its leadership to the next world then, it too should focus on digitizing its currency.
During the pandemic tens of millions of Americans are waiting a month to receive payments by paperchecks that reveals the limits of account-based financial system more strongly.
Giancarlo suggested starting exploring the next level of technology side by side with the existing accounts-based technology.
Other witnesses told to focus on the urgency of making stimulus payments quickly to those who are in need. CEO of Electronic Transactions Association, Jodie Kelley, said as people are currency in crisis, they need it badly.
Kelley was talking about prepaid debit cards by PayPal and Venmo through which distribution of dollars to lower-income people is easy and use of these cards are simple. Some other argued using blockchain to be premature. The problem exists here with the unbanked people and in this jurisdiction Blockchain technology can be a possible solution.
Baradaran mentioned a strategy of using the U.S. Postal Service to create local bank branches in partnership with the Federal Reserve but as reported he said they need to close this cash-digital divide first.
Other opinion came like those non-tokenized digital dollars could also be easily set up. Morgan Ricks, a Professor of Law at Vanderbilt University School of Law, has long touted the concept of a FedAccount saying setting up FedAccounts should be fairly straight forward and easy to accomplish which he said to lawmakers.
A new way
Tokenized dollar can be a way to banking services to unbanked but broadband issue needs to be addressed as said by former regulators. Maybe digital dollar will make the financial system simpler. Access to mobile devices might be another obstacle. Addressing the issue of access to mobile and tokenized dollar might mesmerize some individuals to the new system. Some people outside banking service are comfortable with bearer instruments. The hearing was held for modernizing money to come out of infectious situation.