U.S. must at least be ‘fast adopters’ of digital currency, panel says: Broadband Breakfast

WASHINGTON, May 24, 2022 — Industry and a House representative on Thursday highlighted the benefits of a central bank digital currency, arguing that the regulated coin would help reduce banking costs and onboard those who would otherwise would not use banks in the financial system.

representing Jim Himes, D-Conn., said at an event organized by the Center for Strategies and International Studies, that the digital coin, backed by other currencies, would attract people who do not use the banking system, about 5 .4% of US households. , according to the Federal Deposit Insurance Corporation. According to the data, about three times as many others are “underbanked”, referring to those who engage in expensive non-banking services such as check cashing, money orders, payday lenders and banking services. international money transfer.

Himes, who said the United States was behind in the digital currency game, added that by allowing these Americans access to this new digital system, it would reduce remittance prices and promote the financial inclusion.

Separately, high-powered law firm Skadden, Arps, Slate, Meagher, and Flom explained in a recent memo that a CBDC could provide “safer, faster, and cheaper payments.”

Dante Dispartechief strategy officer and head of global policy at digital financial services company Circle, said that for countries that depend on foreign remittances, this is a pathway to accelerate foreign exchange inflows and increase regulations.

Digital currency an international race

“We are seeing things that we couldn’t do with our money compared to if our money remained in physical or analog form,” Disparte said, adding that on the international front, it’s akin to the “race to space”.

A panel at an event hosted by the Center for Strategic and International Studies earlier this month said the United States was falling behind tech powerhouse China on the digital currency front.

“We don’t need to win every tech race, but at least we need to be quick followers,” Himes said. “Let’s not be left behind by the innovation this could bring.” Disparte agreed with Himes that the United States is behind the game, but added caution to the Federal Reserve’s cautious approach in April to developing a potential CBDC for the United States.

“Better to do it right than to do it first or quickly,” Disparte said.

Himes said his “elevator pitch for a CBDC is based on the benefits the digital dollar offers for innovation.” In the potential development of a CBDC in the United States, the framework or the outcome will not satisfy everyone, but it will be a platform for innovation.

Disparte added that digital dollar currencies such as “blockchain and stablecoin will change the world when people start to think of it less as a digital challenge to the dollar and the US banking system, and more as a foundational technology” for American innovation.

Editor’s Note: An earlier version of this story referenced a report by law firm Skadden Arps and stated that the report argued that a CBDC would enable “safer, faster and cheaper payments.” The article has been edited to clarify that the Skadden report was not mentioned at the CSIS event, and to note that the company explained that a CBDC could enable such “safer, faster and cheaper”.

Sylvia B. Polson