Senate Banking Committee Considers Digitization of Money
On June 30, 2020, the full Senate Committee on Banking, Housing, and Urban Affairs held a virtual hearing entitled “The Digitization of Money and Payments.” The hearing focused on stablecoins and the prospects for a US central bank digital currency, or CBDC.
In his opening statement, Chairman Mike Crapo (R-ID), invited witnesses to discuss “efforts being undertaken by different groups in the development of digital money and payments; design, operational, and risk considerations in their development; what specific problems a CBDC should resolve that are not currently being or cannot be addressed by the litany of payments innovation already completed or underway; and what the rules of the road should be.” Ranking Member Sherrod Brown (D-OH) made an opening statement in which he expressed skepticism for the business activities of large FinTech companies, noting his concerns that consumer protection and equal access to financial services remain paramount, even in a digital world.
Hearing witnesses included former CFTC chairman Christopher Giancarlo, FinTech executive Charles Cascarilla, and law professor Nakita Q. Cuttino. Giancarlo offered three observations that framed his testimony: “the aging of our existing financial market infrastructure, the coming Internet of value, and the economic and social benefits if we do act.” Additionally, Cascarilla posited that stablecoins and the adoption of a CBDC are critical to our financial infrastructure and maintaining the United States’ leading economic position. He believes a global dollar-backed stablecoin or CBDC should be based on the principles of “free markets, private property, privacy, freedom of speech and economic empowerment.” Finally, Cuttino urged caution and, drawing on her academic research, explained how frictions in the payments system impact low-income Americans, including with respect to emerging FinTech services.
The full hearing archive is available here.