WASHINGTON–The Senate Banking Committee heard testimony around the idea of a central bank digital currency, also known as a “digital dollar,” with one analysis noting the most noteworthy news was no lawmaker explicitly rejected the concept.
The Senate heard testimony from Chris Giancarlo, a former regulator who is a strong advocate of a digital dollar; Charles Cascarilla, CEO of Paxos, and Duke law professor Nakita Cuttino.
Senators’ questions focused on financial inclusion and how potential regulations or laws might make digitization easier and more accessible to the unbanked. As CUToday.info has reported, both CUNA and NAFCU have sent letters to Congress on the issue.
Chairman Mike Crapo (R-ID) cited accessibility issues with current systems that require pre-existing financial accounts, and suggested fintech solutions such as stablecoins could provide an alternative. He acknowledged there are concerns around the oversight of some of the coins, which unlike most cryptocurrencies are designed to hold their value relative to fiat.
Concerns Raised
During his remarks, Ranking Member Sherrod Brown (D-OH) expressed concerns that tech companies have made large promises about disrupting existing industries. He cited as examples ride-sharing and social media services, saying they promised to “build a more just and equal country,” but instead the companies essentially found ways to “pay themselves.”
Of the eight senators who asked questions, each was related to the digitization of payments.
Duke Professor Cuttino called for open access to real-time payments. “In the absence of public policy addressing open access payments and real-time payments, low-income and moderate-income Americans will continue to have limited resources needed, whether by traditional fringe services like payday loans or some novel fringe service,” Cuttino said.
Not a ‘Panacea,’ But…
Giancarlo told the Senate the current accounts-based payments system is “slow and exclusionary,” and said while a token-based architecture may not be a “panacea,” it could help to broaden access.
Cascarilla said a federal framework toward regulating crypto companies could be beneficial, even though he noted his own company operates nationwide despite operating under the New York Department of Financial Services’ limited-purpose trust charter.