How a Digital Dollar Can Make the Financial System More Equitable

How a Digital Dollar Can Make the Financial System More Equitable

(Unsplash, modified using Photomosh)

Patrick Murck is chief legal officer at Transparent Systems, developers of distributed settlement solutions, and an affiliate at Harvard’s Berkman Klein Center. Linda Jeng is global head of policy and special counsel at Transparent Systems and a senior fellow at Georgetown’s Institute of International Economic Law.

Digital dollars can be designed in any number of ways, and these design choices will have profound implications for the people who use them. Congress should carefully consider why we need a digital dollar and what should be the core objectives. Is the goal of a digital dollar simply to make payments more efficient, or do we want a digital dollar that helps build a more equitable and inclusive financial system?

Under the strain of civil unrest and the COVID-19 lockdown, cracks that have long existed in the American economic system are widening into fissures, from health care and child care to food production and financial services. The accumulation of these fissures is exacerbating an already significant wealth and opportunity gap between richer and poorer American households, one that all too often falls along racial lines. According to Pew Research Center, the U.S. middle class has been shrinking over the past five decades and is no longer a large majority.

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