By Jeff Hinkle
In the last two months, lawmakers passed four COVID-19-related stimulus packages and they are already negotiating another one.
With each new package comes a new discussion about introducing a federally-regulated digital dollar to deliver stimulus payments to U.S. households. We asked Brad Robertson, CEO of Polyient Labs and Polyient Games, to share his thoughts on the digital dollar and the likelihood lawmakers will approve a centralized digital currency.
A: The digital dollar has come up in every COVID-19-related spending package so far, so I wouldn’t be surprised if it comes up again. But, so far, lawmakers appear hesitant to make it a reality.
A: Last month, Congress signed the largest stimulus package in U.S. history - the $2.2 trillion CARES Act. It allocated about $290 billion to go directly to qualifying taxpayers in the form of $1,200 payments.
That was a month ago and millions of Americans still have no idea where their money is. Since then, the IRS set up an online portal to help locate the payments, but it’s been plagued with problems. Now, the IRS says it will be sending out paper checks to people based on their Zip Codes.
None of this is helpful to the American families in need of immediate relief.
If a digital dollar payment structure were put in place in March - when it was first proposed - banks would have had time to establish accounts and issue debit cards. All the problems and glitches we’ve seen play out over the last month could have been avoided.
A: No. The concept keeps coming up. Most recently, Rashida Tlaib (D-Mich) and Pramila Jayapal (D-Wash) included digital dollars in their Automatic Boost to Communities Act.
However, their legislation is focused on pre-loaded debit cards for every person in the U.S. - cards that will be recharged with money until the COVID-19 crisis passes.
Regardless of whether ABC is seen as a hand up, a handout, an entitlement, or a benefit, I suspect the conversation will get bogged down in partisan squabbling and the idea of digital dollars will be collateral damage.
A: Well, because Senator Brown’s proposed legislation mysteriously disappeared from the CARES package, so it obviously didn't gain enough support.
Still, I do think his legislation appealed to a wider variety of lawmakers, mainly because it offered a secondary function of bringing millions of Americans now classified as unbanked or underbanked into the financial mainstream.
Not only would Brown’s proposal have been beneficial to the unbanked, but it would be a huge boon to the banking industry, which stood to increase its customer base by 20 percent.
A: There is a long history of U.S. lawmakers and regulators being suspicious of - or in some cases, flat-out hostile - towards digital currencies. We saw it in the early days of bitcoin. We saw it again last year in the Libra hearings. Just a couple of months ago, Treasury Secretary Steven Mnuchin dragged out the old trope about money launderers hiding behind cryptocurrencies.
None of this is productive. I know U.S.-based founders who have relocated their blockchain- and crypto-related businesses offshore, because they are frustrated by the regulatory uncertainty and hostility they encounter stateside.
While U.S. regulators demonize digital currencies, Canada, France, Switzerland, Japan, Singapore and other countries are embracing them and fostering business climates more conducive to innovation. Even everyone’s favorite villain, China, is planning on issuing a digital currency next year.
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