For the first time since the U.S. went on lockdown three months ago, lawmakers will convene Thursday to discuss digital currencies and other novel technologies.
The House Financial Services Committee (FSC) Task Force on Financial Technology will be evaluating how FedAccounts and other digital tools might help the federal government distribute stimulus payments to help Americans suffering the economic fallout of COVID-19. The virtual hearing kicks off at noon Eastern (16:00 UTC).
The concept of using FedAccounts to manage digital currencies has gained traction during the pandemic: bills introduced to the committee have suggested using bank accounts managed by the Federal Reserve to issue stimulus payments. The U.S. government has issued one round of payments by check, but only individuals who have filed taxes within the last two years received them. The idea behind FedAccounts is that any U.S. resident could receive these funds in a snap, rather than wait for a piece of paper mailed across several weeks by the Internal Revenue Service (IRS).
“What we discovered is that large segments of the population were not included in the financial system in that they didn’t have either bank account information with the IRS or were otherwise reachable,” said J. Christopher Giancarlo, one of the witnesses for Thursday’s hearing, in a phone interview. “The government had to resort to good old trusty paper checks with the delay in time and the imprecision and the challenges that presented to populations that didn’t have bank accounts.”
Giancarlo will advocate for a slightly different version of this vision, and plans to call for a token-based system rather than an account-based one.
“We think that this both addresses the concern that this particular hearing is there to address but goes way further by also future-proofing the dollar for the coming digital 21st century when things of value will be increasingly tokenized, decentralized and programmable, and we think that the United States needs to recognize the direction that the world is going,” he said.
The witnesses will include Giancarlo in his capacity as former Commodity Futures Trading Commission (CFTC) chair and now Digital Dollar Project director; University of California Irvine School of Law Professor Mehrsa Baradaran; Vanderbilt University School of Law Professor Morgan Ricks (who co-created the concept of a FedAccount); and Electronics Transaction Association Jodie Kelley.
The hearing will be chaired by Rep. Stephen Lynch (D-Mass.), who heads the task force and has previously commented on the potential role distributed ledgers and cryptocurrencies could play in the U.S.
Earlier this year, Lynch proposed recording the Strategic National Stockpile on a blockchain database, to ensure the government has a more accurate picture of the medical supplies it has available.
“We are looking at ways that we can adopt this new technology and address some of the challenges that we have in government,” he told CoinDesk in April about using blockchain and distributed ledger technology. “That attitude and that desire has been out there and so we have been looking for ways to utilize that technology to help government function better.”