Congressional task force on fintech set to delve into the 'digital dollar' concept this week

On Thursday, the House Financial Services Committee's Task Force on Financial Technology is set to hold a hearing on how to better deliver stimulus money during emergencies like the COVID-19 pandemic — and one can expect the idea of a digital dollar to be a major discussion topic.

The title of the House task force hearing is "Inclusive Banking During a Pandemic: Using FedAccounts and Digital Tools to Improve Delivery of Stimulus Payments."

Headlining the witness list is J. Christopher Giancarlo, the former Commodity Futures Trading Commission chair whose term ended in April 2019. Giancarlo's most public role since he left the CFTC has been head of the Digital Dollar Foundation, a nonprofit advocacy group. The Foundation has partnered with the consulting firm Accenture to launch the Digital Dollar Project, which aims to "advance exploration" of a U.S. central bank digital currency (CBDC). 

Last week, the Digital Dollar Project published its first white paper, which made the case that the U.S. urgently needs to begin considering how it might design a digital dollar. Besides Facebook's Libra and China's digital currency project, an additional source of urgency is COVID-19, the paper argued. 

Giancarlo said in an interview with The Block that the pandemic is advancing key questions about how to deliver public benefits more effectively. "How do we get them relief in a crisis immediately and adequately?"

FedAccounts is another approach to creating a kind of digital dollar, which essentially amounts to letting retail customers — not just commercial banks — open bank accounts at Federal Reserve system institutions. 

A proposal based on the idea recently surfaced in a draft bill from House Democrats. Morgan Ricks, a professor at Vanderbilt Law school who co-authored the academic paper that coined the term FedAccounts, is also scheduled to testify on Thursday.

Ricks and Giancarlo will be joined by Jodie Kelly, CEO of the Electronics Association and Mehrsa Baradaran, a professor of law at the University of California, Irvine. The hearing, scheduled for 12 p.m. EST on Thursday, will be live-streamed to the public.