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Facebook’s Libra Creating Shadow Monetary Ecosystem Warns FAC

Facebook’s creation of cryptocurrency Libra will spawn a ‘shadow banking’ system outside of sanctioned financial markets according to US banks.

According to Bloomberg, the Federal Reserve recently asked some of the US largest banks for their opinion on Facebook’s Libra project. The response was overwhelmingly negative with the majority of banks concerned with a potential decline in demand-deposit accounts and bank payment volumes. At a Federal Advisory Council (FAC) meeting, the minutes read, “Facebook is potentially creating a digital monetary ecosystem outside of sanctioned financial markets—or a ‘shadow banking’ system,” the banks warned, “As consumers adopt Libra, more deposits could migrate onto the platform, effectively reducing liquidity, and that disintermediation may further expand into loan and investment services.”

The FAC is a rotating group of 12 bank executives that advises Federal Reserve Board members on economic and financial topics. Additionally, the banks also cited that Facebook’s Libra has the “potential to reduce the ability of states to monitor, manage and influence local economies.”

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US Congressmen Ask Federal Reserve to Create National Digital Currency

Two members of the United States House of Representatives Financial Services Committee recently asked the Federal Reserve if it has any plans to create a U.S. dollar digital currency.

Fed Must Ensure Monetary Stability

On Sept. 30, U.S. Representatives French Hill and Bill Foster sent a letter to to Federal Reserve Board Chairman Jerome Powell outlining their concerns that the “primacy of the U.S. dollar could be in long-term jeopardy from wide adoption of digital fiat currencies.”

The two lawmakers cited concerns that the Fed may be moving too slowly in this regard as over, “40 countries around the world have currently developed or are looking at developing a digital currency.”

The congressmen warned that relying on the private sector to develop digital currencies carries a lot of risks and may result in a “loss of control of monetary policy as well as the ability to implement and enforce effective anti-money laundering and counter-terrorism financing measures.”

The lawmakers noted that the Federal Reserve not only has the capability but also a mandate to ensure stability and safety in the financial system and believe the Fed should “take up the project of developing a U.S. dollar digital currency.”

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Unveiling the Top 5 Surprising Views on Blockchain by AFF leaders

The Asian Financial Forum (AFF) will be hosted at the Hong Kong Exhibition and Convention Centre over two days beginning on 13th of January. The AFF brings together some of the most influential leaders of the global financial and business community to discuss developments and trends in the dynamic markets of Asia.

Blockchain, cryptocurrencies, fintech and virtual assets will be at the centre of many of the discussions and we have selected a few of the speakers that we are most intrigued by and some that our readers may not realize are important or outspoken in the blockchain and crypto space. We have purposely excluded the usual suspects—if you don’t know what PWC’s Henri Arslanian thinks about crypto by now, we really can’t help you.

Below is snapshot of five speakers we are intrigued to hear from and what we understand about their thoughts so far on the new forms of money and finance.

1. Dr Janet L. Yellen

Dr. Janet L. Yellen was the chair of the Board of Governors of the Federal Reserve System from February 2014, serving a full four-year term, to February 3, 2018.

Yellen is a well-publicized crypto skeptic and made headlines on Oct. 29th, 2018 at the Canada FinTech Forum, when she voiced strong concerns regarding Bitcoin and central bank-issued cryptocurrencies.

“I will just say outright I am not a fan, and let me tell you why,” Yellen said. “I know there are hundreds of cryptocurrencies and maybe something is coming down the line that is more appealing but I think first of all, very few transactions are actually handled by bitcoin, and many of those do take place on bitcoin are illegal, illicit transactions.”

Regarding central bank digital currencies, Yellen took aim at other perceived issues. For one thing, central bank-issued cryptocurrencies “could have negative impacts on financial stability,” she said. Yellen further cited that digital cash is effectively untraceable and could lead to further terrorist financing, money laundering and would also make people targets for cyber-attacks.

Yellen will make two appearances at the AFF, the first will be to give a keynote speech on independent monetary policy free from government interference, of which she is an advocate. Her second appearance will be at the end of the first day where she will be engaged in an individual dialogue.

2. Prof Abhijit Vinayak Banerjee

Professor Banerjee is a Ford Foundation Professor of Economics of the Massachusetts Institute of Technology. He was the recipient of the 2019 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, awarded jointly with Esther Duflo and Michael Kremer “for their experimental approach to alleviating global poverty.”

Banerjee will speak at the keynote luncheon on the 14th of January at AFF on the topic of financial inclusion. Financial inclusion is a common developmental theme for developing countries, such as India, which houses more than 90% of the world’s unbanked population.

Those in the crypto space know that cryptocurrency adoption is high in unbanked majority countries as it provides a cheap and fast from of remittance and comparatively low fees to any Swift or Western Union transfer.

While Banerjee has not been outspoken in the blockchain and crypto space, he and his team are known for approaching subjects with a measure of practicality and we are certain his speech will need to address the technology which is currently offering a practical measure for financial inclusion to the unbanked.

3. Dr Geraldine Buckingham

Dr. Geraldine Buckingham is BlackRock’s Chair and Head of Asia Pacific and a member of the firm’s Global Executive Committee.

She previously served as BlackRock’s Global Head of Corporate Strategy and was the youngest executive reporting directly to CEO Larry Fink, Buckingham was tasked with long-term strategic thinking at the world’s largest asset manager.

During her career with Blackrock, Buckingham became quite well known for helping lead the firm — and its $5.7 trillion under management — to double down on algorithms and robot traders making investment decisions over human stock pickers. Beyond tracking tech trends, the former emergency room surgeon also keeps a finger on the pulse of politics and regulatory changes. She was named to Fortune Magazine and Crain’s New York Business’ “40 Under 40” lists for 2017.

Set to appear on a Panel discussion on Asset and Wealth Management in Asia, we are intrigued to hear her thoughts on the complex environment asset managers are faced with due to the rapid wealth accumulation and unprecedented growth of asset and wealth management in Asia and specifically China. Will her proposals for better risk-adjusted returns lean heavily to toward technological applications? History would indicate as much and an article published by Cointelegraph on July 19th 2019 quotes Larry Fink as suggesting that the world needs “technology” to reduce interchange and transaction fees not a new currency such as “Libra”.

4. Mr Jin Liqun

Mr Jin Liqun is the President and Chairman of the Asian Infrastructure Investment Bank (AIIB).

Liqun has had a very distinguished career to date. He was formerly the Chairman of China International Capital Corporation, the Vice President of the Asian Development Bank and the Vice Minister of Finance of the People’s Republic of China.

While Liqun has not been exceptionally outspoken in the blockchain field, he is obviously a key figure in the financial services sector faced with the increasing challenges of the global macro-environment. Countries across the world are seeking innovative ways to achieve breakthroughs for financial growth and inclusion.

As the AIIB will play a key role in China’s Belt and Road Initiative which will reinvigorate the old silk road and create enhanced trade and financial services across Eurasia and Africa. Liqun should be the man to look out for on supporting inclusive growth, particularly with the successive advancement of Fintech. In a recent AIIB report entitled Infrastructure 3.0—how new technologies will facilitate intra-Asian trade and integration, the organization outlines distributed ledger technology (DLT) as an enabling technology. The report further stipulates that it is not “whether” these innovations will find their way into regional supply chains, but “when” and how quickly.

5. Mr Sergey Shvetsov

Sergey Shvetsov is the First Deputy Governor of the Bank of Russia. In 2017 Russia decided to outlaw Bitcoin exchange websites. At the centre of the announcements was Sergei Shvetsov.

This announcement had a severe effect on the Bitcoin price that was rallying towards $5,000. In a flash crash, Bitcoin’s value dropped by $600 before rebounding somewhat. Shvetsov was quoted at a conference in Moscow saying, “We can not stand apart. We can not give direct and easy access to such dubious instruments for retail (investors),”

Shvetsov will appear on a panel discussion on the first day off AFF and will discuss the need for financial institutions to explore innovative ways to remain profitable and competitive. As this discussion will include making use of emerging technologies and considering alternative markets—we are certain the subject of cryptocurrency and stablecoins will be broached and given Russia’s continued apprehension towards Bitcoin, we will be front row to hear how his opinions have developed.See you at the Asian Financial Forum—for more information please visit the official website.

Former Fed Chair Janet Yellen Comments on AI and Technology Advancement at the AFF 2020

At this year’s Asian Financial Forum, held in Hong Kong, former Federal Reserve Chair Janet Yellen was invited to speak at a Luncheon with moderator Norman Chan, the Senior Advisor at the Hong Kong Academy of Finance.

She started off elaborating on her life after working for the Federal Reserve, “Once a central banker, always a central banker. I find myself addicted to central banking.” Yellen also mentioned the current state of central banking, that the “processes are coming together, but it is important to keep in mind of finding common ground.”

She was asked whether existing central bankers, could be replaced with AI robotic policymakers. Yellen responded that she was not sure about how AI will listen to experiences, and communicate with stakeholders, as central bankers do a lot more than interpret data; they also need to understand what people see in their lives.

Yellen believes that political independence “might be a good idea,” as economic performance is best when central banks work independently from politics. In contrast, US President Trump believes that central banks should not have independence and should have political influence. Concluding her response to the question, Yellen believes that her successors and colleagues have been doing a great job and have been making non-political judgments.

On the note of disruptive technology, Yellen said that the current Trump administration’s foreign policy had driven attention to advanced technology as “having national security issues.”

However, Yellen has confidence in technology, saying, “Tech will be central to military applications, and all important computational applications in the future.” She added that some of the current technological applications are not compatible and interoperable; therefore, the advancement of technology would be necessary for welfare, and the tensions between the US and China as well.

Federal Reserve Considers a FEDcoin in Wake of Rising Stablecoin and CBDC Development

Federal Reserve Governor, Lael Brainard said that the Fed is weighing the developments and policy issues in the digital payments sector and experimenting with central bank digital currencies (CBDC) in consideration of potentially issuing its own digital currency.

According to Reuters, Brainard’s comments while speaking with the Stanford Graduate School of Business on Feb. 5, suggested that the Federal Reserve is changing its attitude towards the possibility of a Fed digital currency.

Risks of Libra

At the conference, Brainard relayed the potential of digitalized payment solutions to “deliver greater value at lower cost”, before returning to her familiar diatribe regarding Facebook’s Libra and the onslaught of private stablecoins entering the market.

”There are risks,” Brainard said referring to private digital payment systems and alluding to Libra, “Some of the new players are outside the financial system’s regulatory guardrails, and their new currencies could pose challenges in areas such as illicit finance, privacy, financial stability, and monetary transmission.”

It could be deduced that the Fed’s major impetus for joining in on the digital currencies is largely around the dangers it anticipates from a privately owned stable coin with the ability to replace sovereign currency. On Dec. 18, Brainard appeared before a European Central Bank Forum and cautioned the ECB forum that the risks already associated with cryptocurrencies within the financial system would be exacerbated by a widely adopted stablecoin for everyday transactions. As Facebook’s active users account for nearly one-third of the global population, the possibility for quick massive adoption of Libra is very real.

CBDC Pressure

The Central Banks are determined not to be left behind by the new private digital players and adapt to blockchain and digital finance technology for their own leverage.

Research around central bank digital currencies (CBDC) is a major focus for the Central banks currently with six of the world’s central banks coming together to create a working group for experimentation and assessment.

China has been very public about its desire to be the first nation to launch a CBDC and has over 70 patents registered to their project. They even claimed last September that they would have a working version in the coming months but it remains to be seen.

Brainard told the Stanford audience that the Fed is also looking to develop its own real-time payment settlements service and they are “conducting research and experimentation related to distributed ledger technologies and their potential use-case for digital currencies.”

Fed Must Ensure Monetary Stability

As the world’s Central banks have publicly announced their bid to develop CBDC and digital payments, the Fed has also been criticized in the past few months for being too slow to react

On Sept. 30, 2019, US Representatives French Hill and Bill Foster sent a letter to the Federal Reserve Board Chairman, Jerome Powell, outlining their concerns that the “primacy of the US dollar could be in long-term jeopardy from the wide adoption of digital fiat currencies.”

From Brainard’s appearance at Stanford, it appears that the Fed has heard the message loud and clear and are now working with Central Banks to advance their own understanding of CBDC. It may not be long before we hear a concrete announcement of a Federal Reserve Digital Currency.

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US Fed Chair Jerome Powell Grilled Over FedCoin Digital Currency Progress

Federal Reserve Chairman Jerome Powell testified before the US House Financial Services Committee on the state of the US economy and monetary policy.

Rep. Bill Foster of Illinois spent his entire five minutes asking Powell about the progress being made regarding the topic of CBDC or central bank digital currencies.

Foster questioned Powell concerning the potential for a CBDC and how it can impact the suffering economy. Powell was honest in saying that the dollar is holding fine, particularly when compared to the failing currencies of other currencies. The Fed chair acknowledged the significance of the dollar to the financial systems of the United States.

Powell stated,“I think having a single government currency at the core of the financial system is something that has served us well. It is a highly basic thing, which has not been in question.”

The Fed chair is embracing digital currency efforts and told the House committee that “we are working hard on it.” The ultimate aim is to digitize the dollar in the future, which has been triggered since debates started over Facebook’s Libra plans. Such ambitious plans are in line with the Federal Reserve’s previous announcement that it is conducting experimentation and research related to potential use cases for digital currencies.

While addressing the Congress meeting, Powell acknowledged that there was a risk involved in central banks taking up the responsibility of blockchain and cryptocurrency. He revealed that the Fedcoin plan was first proposed to combat the idea of privately-owned cryptocurrencies. Powell admitted that banks around the globe are looking into central bank digital currencies.

Powell said: “Currently, every major central bank is taking an in-depth look at that. We feel that it is our obligation being that now technology has that possible. I think it is much necessary for us and other central banks to understand the benefits and costs associated with a possible digital currency.”

China’s digital yuan a wake-up call for the US

Foster asked Powell about the current Fed’s plan in responding to China’s efforts to launch a digital yuan. Powell responded that they have visibility regarding China’s efforts. He identified that China and the US are different when racing central digital currency. He said, “They are in an entirely different institutional context.”

The Fed chair stated that China is building digital currency in a completely different institutional context. He further mentioned that China’s position on cryptocurrencies is quite different from Bitcoin. China wants to develop a digital currency, which is run and centralized by the Chinese government, but Bitcoin functions on a free and decentralized model. In the US, where consumers are used to privacy and freedom, any financial ledger where the government has access to all the data would be greeted with intense scrutiny.

Powell emphasized that the Federal Reserve has not officially initiated the launch or creation of a digital dollar. He said, “We’ve not decided to conduct this. There are several questions, which should be answered around a digital currency for the US, including issues concerning privacy issues, cyber issues, and several operational alternatives as they present themselves. So, we are going to be working through all of that and do that work responsibly and thoroughly.”

However, Foster is concerned that if the federal government does not react and develop a plan for a digital currency quickly, then potential competitors like China could launch central bank digital currencies and consequently gain an upper hand. Foster pointed out that China’s intention to implement the digital yuan among nations involved in its Belt and Road initiative could put the dollar’s world reserve currency status at risk.

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Fed Slashes Interest Rate to Near Zero and Launches 700Bn QE, Bitcoin Hovers Near $5k

The recent stock market crash has caused a wide “Red Sea” of losses for equities and cryptocurrencies. Bitcoin price has once dipped below $4000 and now hovers near $5000.

Interest Rate Cut

In an attempt to stimulate the US economy amid coronavirus pandemic, the Federal Reserve (“the Fed”) decided to slash the main interest rate to near zero together with the purchase of $700 billion Treasury securities.

The Fed has cut the benchmark federal fund rate by one percentage point, which is now at a range of 0 – 0.25%. According to the Fed, the decision is consistent with its goal to support economic activity, robust labor market conditions, and restore the inflation rate to the Committee’s symmetric 2% objective. The Fed intends to maintain the new target range until they feel confident that the U.S. economy is stabilized amid coronavirus pandemic, to achieve its maximum employment and price stability goals.

700 billion quantitative easing program

Regarding the $700 billion purchase of Treasury securities, the Fed announced to increase its holding of Treasury securities by at least $500 billion and its holding of agency mortgage-backed securities by at least 200 million. Besides, the Fed will reinvest all principal payments from the Federal Reserve’s holding of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions are part of the Fed tools to smoothen the flow of credits to businesses and households.

US President Donald Trump welcomed the latest move by the Fed, “It makes me very happy and I want to congratulate the Federal Reserve. That’s a big step and I’m very happy they did it.”

Cutting of primary credit rate

The Fed also announced to lower the primary credit rate by 150 basis points (bps) to 0.25%, which is comprised of a 100 bps reduction of the target range of the Federal funds rate and 50 bps reduction in primary credit rate. The rate cut is complemented by letting banks borrow from the discount window for as long as 90 days, prepayable and renewable by the borrower on a daily basis. The Fed believes such moves can encourage depository institutions to help meet demands for credit from households and businesses.

To enhance the US Dollar liquidity with other central banks

The Fed coordinated with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank to enhance the liquidity of USD via the standing US dollar liquidity swap line arrangements.

As agreed by the central banks, the pricing on the standing U.S. dollar liquidity swap arrangement will be the US dollar overnight index swap (OIS) rate plus 25 bps. Apart from the current offer of 1-week maturity operations, the foreign central banks also agreed to begin offering USD weekly in each jurisdiction with an 84-day maturity. This aims to ease the strains on the supply of credit to households and businesses domestically and internationally.

What happened to Bitcoin?

Source: CoinMarketCap

Following the announcement by the Fed, Bitcoin price once topped $5824, but then hovered near $5000. Despite the quantitative easing by the Fed, investors are still concerned with global economic uncertainty caused by the coronavirus, such as nations to close their borders, coronavirus “herd immunity” plan by the UK government and quarantine on arrivals by various countries.

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Cardano CEO Getting a OneCoin Vibe from Federal Reserve's 'Infinite Cash' Statement

In an interview given to CBS’s 60 Minutes on March 22, 2020, Neel Kashkari, the President of Federal Reserve Bank of Minneapolis made a controversial remark after being asked to comment on how the state would deal with it if a situation like the 2008 financial crisis came again due the Coronavirus outbreak.

On being asked whether the Federal Reserve Bank is equipped well enough to provide money to all the banks if they needed to satisfy all incoming panic withdrawals, Mr. Neel Kashkari was quick to respond that this is the reason why Federal Reserve Bank exists.

“Yes. This is the fundamental reason the Federal Reserve exists.”, said Mr. Neel Kashkari. He further added, “If everybody gets scared at the same time and they demand their money back, that’s why the Federal Reserve is here, is to make sure that there’s liquidity, that there’s money to meet those demands.”

Mr. Neel Kashkari further clarified his controversial statement by saying ‘that’s what Congress has told us to do’. He stated that they have been given the authority to print money and provide liquidity in the financial system by first creating it electronically and then printing it with the Treasury Department.

OneCoin was a Ponzi token scam that aimed to capitalize of the success and hype of Bitcoin. It is estimated that the scam costed its investors around $4 Billion as they had no idea that the tokens that they were buying had no value.

And it wasn’t just the CEO of Cardano but also other cryptocurrency experts like Anthony Pompliano and Changpeng Zhao who took a dig at Neel Kashkari’s comment.

Anthony Pompliano, co-founder of Morgan Creek Digital tweeted, “History tells us that this is not sustainable long-term for a currency.”

“Ever heard about ‘supply, demand and price’? What happens to price when you have infinite supply?”, tweets CEO of Binance, Changpeng Zhao.

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US Democrats Propose Distributing Covid-19 Stimulus Payments Through Digital Dollars to Unbanked Citizens

As markets across the globe continue to feel the crunch of economic disruption caused by the coronavirus pandemic, debate has raged over a massive stimulus package being proposed in the US which could see the IRS send up to $2000 a month to all US citizens until the recession takes a turn for the better.According to a draft of the Covid-19 economic stimulus legislation, House Democrats are proposing the use of digital dollars and digital wallets to expedite the distribution of the emergency funds to unbanked citizens.

Digital Stimulus Payments for Families

In section 101 of the draft entitled ‘Direct Stimulus Payments For Families’, the draft which has been circulating since March 23, specifically calls for the creation of digital wallets for all American citizens which are to be maintained by the Federal Reserve.

The paper defines the term Digital Dollar as, “(A) a balance expressed as a dollar value consisting of digital ledger entries that are recorded as liabilities in the accounts of any Federal Reserve Banks or (B) an electronic unit of value, redeemable by an eligible financial institution.”

The section outlines that every adult in the US earning less than $75,000 a year would receive the $2000 per month stimulus payment, with the payments becoming less and less as the market rebalances.

This latest draft of the bill comes from the office of House Speaker, Nancy Pelosi (D-CA) orginating on March 22, according to Bloomberg.

The Democrat version of the bill has enormous financial implications for the US, is over a thousand pages long and aims at distributing upwards of $1.8 trillion. The Republican version of the bill was immediately blocked when it made its appearance in Congress on both occasions (March 22 and 23) and was criticized for being too focused on helping big business.

Economic Countermeasures

Almost as concerning as the global economies downturn, is the projected inflation aftermath of the stimulus packages and counter measures being imposed by the Central banks and governments that have been fast to respond to the disruption caused by the Coronavirus.

Recent analysis by Bitmex highlighted, “In the US the Federal reserve has lowered interest rates to near zero (0% to 0.25%), announced the purchase of at least $500bn of treasuries and $200bn of mortgage backed securities, and also reduced the commercial bank reserve requirement to absolute zero.”Bitmex believes that there are further measure to come, but it is clear that these attempts to restabalize the broken system are, “the last major throw of the dice from central bankers. Monetary policy will not be enough.”

The Fed and the Infinite Money Pool

As reported by Blockchain.News, in an interview given to CBS’s 60 Minutes on March 22, Neel Kashkari, the President of Federal Reserve Bank of Minneapolis made a controversial remark after being asked to comment on how the state would deal with it if a situation like the 2008 financial crisis came again due the Coronavirus outbreak.

On being asked whether the Federal Reserve Bank is equipped to provide money to the US banks if they needed to satisfy all incoming panic withdrawals, Mr. Neel Kashkari was quick to respond that this is the reason why Federal Reserve Bank exists.

“Yes. This is the fundamental reason the Federal Reserve exists.”, said Mr. Neel Kashkari. He further added, “If everybody gets scared at the same time and they demand their money back, that’s why the Federal Reserve is here, is to make sure that there’s liquidity and that there’s money to meet those demands.”

After the interview went live on the internet it received a wave of public criticism, one of the voice was the CEO of Cardano, Charles Hoskinson. He went on to tweet that the comments made by Neel Kashkari gave the US Dollar a real OneCoin Ponzi scam vibe. These sentiments were reiterated by CZ of Binance and Anthony Pompliano, co-founder of Morgan Creek Digital who tweeted, “History tells us that this is not sustainable long-term for a currency.”

Can US Lawmakers Really Just Mint Two $1 Trillion Coins to Back a Digital Dollar COVID Stimulus with "No Additional Debt"?

As the economy continues to deteriorate in the ongoing COVID-19 pandemic climate, US Lawmakers are once again pitching the creation of a sovereign digital dollar to quickly distribute the proposed stimulus packages.

Congresswomen Rashida Tlaib (MI-13) and Pramila Jayapal (WA-7) unveiled the Automatic BOOST to Communities Act (ABC), legislation to immediately provide a $2,000 payment using BOOST debit cards to every person in America as economic stimulus relief during the COVID-19 crisis.

After the initial payment, the ABC Act will provide a further $1,000 in recurring monthly payments for a full year from the time the coronavirus pandemic has been defeated.

According to a release on 16 April, “the ABC Act would be funded directly from the Treasury with no additional debt issued by minting two $1 trillion coins, and additional coins as necessary.”

FedAccounts and the Two Trillion Dollar Question

While there has been discussion about the Federal Reserve getting involved in the ongoing race for Central Bank Digital Currency (CBDC) dominance with a proposed FedCOIN, the motivations previously revolved around concerns with China’s determination to launch their DCEP and Facebook’s Libra project, which incidentally may be showing up once again on the Fed’s radar with the release of their new white paper earlier today.

The ABC Act would jolt the Federal Reserve into action if passed, and the Fed would be authorised by Congress to create digital wallets for all people and businesses in the US. These digital wallets are called “FedAccounts” in the proposal. The digital dollars that will be distributed are not going to be stablecoins and there is no mention of the payments being based on blockchain infrastructure.

An alarming notion is the insinuation that the FED must recognise the two newly minted Treasury coins valued at a trillion dollars each to back the payments with “no additional debt” and the explanation given seems like an exercise in creative accounting. According to Fortune, “Under the plan, the Treasury would mint the two $1 trillion coins, then deposit them at the Federal Reserve. Forced by law to recognize the coins as legal tender, the Fed would add $2 trillion to the Treasury’s account. The Treasury would then use this money, under Congress’s direction, for stimulus.”

FinTechs Enlisted in the Fight Against COVID

The bill was introduced as concerns continue to be raised regarding the timeliness of the $1,200 stimulus payments authorized under the CARES Act. While the IRS has been distributing the stimulus, it has not been an easy or quick process so far.

An appeal to Congress by Financial Innovation Now (FIN), on March 19, for FinTech companies to help distribute the loans digitally was given the green light by Lawmakers over the last week.

PayPal, Square and Intuit have received the US Government’s approval to take part in the Small Business Administration’s (SBA) Paycheck Protection Program(PPP) which was established in response to the COVID-19 pandemic triggered global financial crisis.

FIN is a FinTech alliance which includes Square, PayPal, Intuit and Stripe. In the letter addressed to lawmakers they argued that they had “the reach, relationships, and digital capabilities to reach those businesses most vulnerable” in a more timely fashion while the traditional US insititutions were left wanting in this regard.

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