Legislation introduced in the U.S. Congress this week signals the Overton Window – a metric of what’s politically feasible – is opening in favor of national digital currencies.
“We are becoming resourceful in looking at existing technology – and at the flaws in the current system – and applying them to future and current needs,” said Catherine Coley, CEO of Binance.US.
Coley wrote an op-ed last weekend urging Congress to consider blockchain-based stablecoins as a way to payout a direct stimulus. It would save money and reduce contagion risks, she argued. However, the current drafts make no mention of a digital dollar being maintained on a decentralized ledger.
“I’m not going to say I prefer one way or the other as long as we’re rapidly moving towards this solution,” Coley said. “Any progress on this matter is a win for everyone. The faster we can get funds into the hands of those that need financial support at this time is crucial.”
Coley’s arguments for digitizing cash payments are pragmatic. There isn’t scientific consensus yet on how COVID-19 spreads, and mailing physical checks to home addresses may negligently expose people to the virus.
Similarly, Coley reasons that the last time the federal government posted rebates in the mail, in 2008, during Henry Paulson’s tenure at Treasury, many people without stable residences were excluded.
“If the stimulus were delivered via digital assets, every American with internet access, a Social Security number and proof of address could have the ability to access their stimulus,” she wrote. “This [hygienic] distribution would provide a variety of ways for people to get access to cash,” she said.
One possible impetus for the government’s examination of digital currencies during this crisis is the much-mistrusted Libra project, spearheaded by Facebook, but moving to decentralize. Coley said, “Libra is perfectly positioned to provide something like this,” but, if up and running, would require everyone to get a Facebook account.
“Are you going to force everyone to open up an account on exchange? The answer is no, but there is an option now for people that are not near their mailboxes,” she said.
“This will resonate with people. They’ll understand what a digital dollar means. Even if [Congress] had to pull it back and say, ‘We don’t want people connecting the dots,’” said Coley. “It means they already know what true digital assets are and therefore are afraid people would connect more dots.”
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