Should Congress prevent banks from charging for pass-through digital dollar wallets?
• “ I … started Paxos to modernize the financial market infrastructure that our economy relies on every day. We believe it’s important to create a more transparent and open financial system which better fosters and achieves customer inclusion and market competition. One that is built for a digital age, that runs 24/7, where money and other assets can be transferred instantaneously in a trustworthy way.” Source: Charles Cascarilla (Co-founder of Paxos)
• “The COVID-19 crisis has revealed fundamental shortcomings in the capacity of existing government payment relationships to swiftly channel financial resources to the non-banked public. The US Federal Reserve has no direct relations or connectivity with the non-banked public. It cannot therefore distribute or coordinate crisis relief to resident households. Away from the Federal Reserve, Federal and State government agencies have only partial direct banking relationships with the general public through tax and social benefits but their reach is not universal. Had a US CBDC been in circulation during the COVID-19 crisis, it would have enabled the sending of monetary relief instantaneously to the digital wallets of targeted beneficiaries.” Source: The Honorable J. Christopher Giancarlo (Former Chairman of US CFTC)
This bill requires Federal Reserve member banks to provide digital pass-through accounts (i.e., digital dollar wallets) to residents and citizens, and to businesses domiciled in the United States. These accounts must provide specified banking services to eligible persons who elect to deposit funds into these accounts, including access to COVID-19 (i.e., coronavirus disease 2019) aid payments. A pass-through digital dollar wallet is a wallet application that stores electronic information of several cards for payment. Sponsor: Sen. Sherrod Brown (Democrat, Ohio)
- Brown Introduces New Legislation to Help Hardworking Americans In the Coronavirus Relief Package (Press Release)
- Senate Banking Committee Holds Hearing on Digital Banking (Native American Financial Services Association)
- US Senate Committee Weighs Pros and Cons of Digital Dollar (PYMNTS)
- Digital Dollar and Digital Wallet Bill Surfaces in the U.S. Senate (Forbes)