- The Task Force on Financial Technology talks about cryptocurrency and blockchain as potential solutions to promoting banking inclusivity.
On Thursday morning, the Task Force on Financial Technology held a virtual hearing titled, “Inclusive Banking During a Pandemic: Using FedAccounts and Digital Tools to Improve Delivery of Stimulus Payments.”
Around the 13 minute mark, US Representative Tom Emmer talked about the decreasing role of cash as digital reliance increases.
To engage in electronic commerce citizens need an intermediary in most cases, including many cryptocurrencies.REP. Tom Emmer (MN-6) Ranking Member
During the hearing, several speakers also discussed the potential of a US digital dollar (CBDC) using distributed ledger technology (DLT). Amid the pandemic, a CBDC can promote financial inclusivity and help many without access to physical banks. Also, several speakers discussed privacy concerns that may arise with a US CBDC regarding the amount of information available to law enforcement.
Central Bank Digital Currency
A central bank digital currency is a digital form of a fiat currency. Each unit of a CBDC can be used as a unit of paper money.
One of the many benefits of a CBDC is accessibility. According to Statista, there were 4.57 billion active internet users in April 2020. While the majority of the world uses the internet, not everyone has access to a physical bank. As a result, a CBDC can reach those with an internet connection, ensuring that even amid the pandemic, governments can effectively distribute stimulus and ensure that their citizens receive funds when they need it the most.
Many countries are already actively working or researching the potential benefits of a central bank digital currency.
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