I zoomed with Catherine Coley, who’s been at Morgan Stanley, Ripple and is now CEO of Binance.us a digital asset trading platform. She just wrote an article about why stablecoins should be used for the emergency Coronavirus stimulus payments. And then I checked in on Michael Casey and Noelle Atchison from Coindesk. They did a good video interview explaining the issue. In the podcast, Casey, Coindesk’s chief content editor, (and host of our Digital Money Forum at CES) put this new application of digital currency into perspective, saying “It should be thought of a way to distribute funds in a very targeted way.” Recognizing that using some form of government-backed coins flies in the face of the more purist decentralized notion of digital currency, Casey suggests it’s “befitting of the crisis mode we find ourselves in.”
In my conversation with Coley, she agreed. “Now is the time to test what we’ve built using stable coins,” she said. “In this unique crisis, there’s a requirement to stay in place, not leave the home, minimize deliveries. The traditional banking system is antithetical to the times.”
It’s no understatement that the COVID-19 virus has made just about everyone who has an internet connection more tech-savvy and tech-dependent. Tech for so many has become a lifeline for remote working, education, family and friend connectedness and even health. In a matter of a few short weeks, we’ve upped our nation’s digital game.
Why not banking? After all, if you have Apple Pay or another contactless payment system on your phone or credit card, you are already comfortable with digital transactions and you’re probably striving not to touch anything at all at a checkout counter. Last year’s debacle with Facebook’s roll-out of Libra, a global currency that would be pegged to a stablecoin, was a truly solid idea but introduced at the wrong time from the worst possible messenger. (Facebook’s privacy issues were at their apex in the news, so Libra’s adoption was implausible just on that basis alone.) While digital wallets have, until now, taken off more slowly than many had expected, the pieces are in place to pivot to digital transactions quickly.
There’s also some sign of renewed government bipartisanship in the face of the crisis, and it might expand to include finance. Democrats can embrace digital currency as a more streamlined way to get dollars into the hands of those without bank accounts. Republicans can focus on the fact that we need a digital currency plan to stay competitive with other nations. Purists who believe the system should be completely decentralized without a central entity to control the disbursements would be the only whiners. But hey, carpe diem.
In our conversation, Coley reminded me that the emergence of digital currency was born out of the 2008 financial crisis. (Bitcoin, which started the entire movement, was invented in 2008 and launched in early 2009.) Watching big corporations get government bailouts kickstarted the nascent digital currency model. Wouldn’t it be poetic justice if what began as a reaction to one recession helped save us from the next?
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