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One of the biggest issues that the stimulus checks have presented is getting the funds in the pockets of Americans in a timely fashion.
And now that we are talking about potential repeat payments, the need to get the funds over to Americans in an efficient manner is even more important.
There is one proposed act that would change up the process drastically and it involves trillion dollar platinum coins, pre-loaded debit cards, and a new digital cash system.
The Automatic BOOST to Communities Act would immediately provide a U.S. Debit Card pre-loaded with $2,000 to every person in America.
Each card would be recharged with $1,000 monthly until one year after the end of the Coronavirus crisis.
These pre-paid digital cash cards could be used to withdraw physical currency at regular ATMs or FDIC-insured banks or credit unions or used to pay for goods just like a credit card.
The way that the funding would work is pretty interesting, and I’d be lying to you if I said I completely understand the process.
Basically the US Treasury Secretary would direct the U.S. Mint to issue two $1 trillion platinum coins, under the legal authority provided by 31 U.S.C. § 5112(k).
The rest of the process would work based on the following:
- The Federal Reserve would credit the U.S. Mint’s account at the Fed with $2 trillion in reserves.
- The Fed would retain ownership over the two $1 trillion coins permanently in order to ensure its own balance sheet remains fully capitalized by the Treasury.
- The Treasury Secretary would “sweep” the newly created reserve funds from the Mint’s account into the regular Treasury General Account.
- The Treasury would make the funds available to the Bureau of the Fiscal Service to disperse to every person in America in the form of pre-paid U.S. Debit Cards.
The drafters would like this card infrastructure to be converted into a permanent digital public currency wallet system. It would serve as an “eCash” complement to universal Fed Accounts and/or Postal Bank Accounts for All.
It would be very nice to see the country move in a direction like this where a proper infrastructure is in place to streamline delivery of funds in times of emergency/disaster.
This type of system could be used to offer refunds after hurricanes and other types of events involving catastrophic damage and huge losses where people need funds from loans and grants in order to stay alive and healthy or rebuild.
But the bill as drafted presents a lot of problems.
There are provisions related to citizenship status qualifications and progressive tax reform that will be highly contested among other things so I’m not sure how optimistic I am about this particular bill but it is interesting nonetheless.
I do think that when it comes to distributing funds, our current system is obviously obsolete and that as we go into the future things will need to be reconfigured and restructured in a way that is more with the times (think crypto). It sounds like having these debit cards/Fedaccounts could be a smart way to go about it if executed properly.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.