Christoper Giancarlo (CoinDesk archives)
The idea of a digital dollar will once again rear its head before the U.S. Congress on Tuesday.
The U.S. Senate Committee on Banking, Housing and Urban Affairs will hold a hearing on The Digitization of Money and Payments, and while few details have been released, the witnesses – former Commodity Futures Trading Commission (CFTC) Chair J. Christopher Giancarlo, Paxos co-founder and CEO Charles Cascarilla and Duke University Visiting Professor of Law Nakita Cuttino – suggest the focus may center in part around central bank digital currencies and stablecoins.
The hearing may tread similar ground to a recent one hosted by a subcommittee with the House Financial Services Committee, which addressed questions of financial inclusion and how best to send relief funds to U.S. residents quickly and efficiently. Witnesses at the time called for tried-and-proven alternatives to building a novel tokenized system.
Cuttino, in pre-written opening remarks, said while some U.S. residents might turn to digital banking and payment systems, low-income Americans disproportionately prefer to transact with bank tellers.
Digital systems come with their own drawbacks: nearly 1-in-5 Americans dont have smartphones, limiting their access to digital banking services, while nearly 10 percent dont have alternative internet access in their homes. Cuttino also raised questions about the business models for central bank digital currencies and stablecoins.
If services are free, what alternative tradeoffs are consumers making (e.g., consumer data)? Is consumer data being used to exploit behavioral weaknesses to their detriment? Additionally, are consumer conditions improved by a shift to the novel solution? Ultimately, fintech solutions should not merely move the most Americans from the fringe financial marketplace to a fringe digital economy, Cuttino says.