Senate Banking Committee Holds Hearing on Digital Banking
Earlier this week, the U.S. Senate Committee on Banking, Housing, and Urban Affairs conducted a remote hearing to examine “The Digitization of Money and Payments.” This comes as the COVID-19 pandemic has given the U.S. government another lens to determine the efficiency of digital monetization, as most Americans have had to rely on some form of digital banking during the crisis.
One of the main topics of discussion at the hearing was the development of cryptocurrencies. These financial technologies have “long claimed the ability to provide faster, less-expensive payments on a global scale, with some degree of anonymity,” said Senator Mike Crapo (R-Idaho), Chairman of the Committee, in his opening statement.
“Still, there are legitimate questions about certain stablecoins and digital currencies more broadly, such as the degree of oversight, impact on the transmission of monetary policy and disruption of banks’ traditional financial intermediation,” Crapo continued.
Senator Sherrod Brown (D-Ohio), Ranking Member on the Committee, used the hearing to make the case for legislation he introduced, entitled the Banking for All Act.
He said his legislation “would allow every American to walk into any bank or post office in the country – or go online – and set up a free, secure bank account, backed by the Federal Reserve and hooked directly into the Federal Reserve’s payment systems.”
“Banking for All means no more check cashing fees,” Brown continued. “No more paying to use the money you already earned. No more waiting until Wednesday to use money you were paid on Friday. It means all workers would be able to fully participate in the economy that they keep being told they’re essential to. And it means if you’re lucky enough to have some savings at the end of the month, you get the same great interest rate the big banks do.”
The witnesses at the hearing included the Honorable J. Christopher Giancarlo, Senior Counsel, Willkie Farr & Gallagher LLP, and former Chairman, U.S. Commodity Futures Trading Commission; Charles Cascarilla, Chief Executive Officer and Co-Founder, Paxos; and Nakita Q. Cuttino, visiting Assistant Professor of Law, Duke University School of Law.
A recording of the hearing and full statements by Chairman Crapo, Ranking Member Brown, and each of the witnesses is available at https://www.banking.senate.gov/hearings/the-digitization-of-money-and-payments.