{"id":378099,"date":"2021-12-08T14:00:00","date_gmt":"2021-12-08T11:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/peter-morici-digital-dollars-are-coming-but-is-the-fed-ready\/"},"modified":"2021-12-08T14:00:00","modified_gmt":"2021-12-08T11:00:00","slug":"peter-morici-digital-dollars-are-coming-but-is-the-fed-ready","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/peter-morici-digital-dollars-are-coming-but-is-the-fed-ready\/","title":{"rendered":"#Peter Morici: Digital dollars are coming, but is the Fed ready?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3dfc8ea1644\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3dfc8ea1644\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/peter-morici-digital-dollars-are-coming-but-is-the-fed-ready\/#Fully_digital_currencies_will_be_cheaper_more_secure_and_more_inclusive_than_paper_currency_and_checks\" >Fully digital currencies will be cheaper, more secure and more inclusive than paper currency and checks<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/peter-morici-digital-dollars-are-coming-but-is-the-fed-ready\/#The_payments_system\" >The payments system<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/peter-morici-digital-dollars-are-coming-but-is-the-fed-ready\/#Payments_system\" >Payments system<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/peter-morici-digital-dollars-are-coming-but-is-the-fed-ready\/#Government_payments\" >Government payments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/peter-morici-digital-dollars-are-coming-but-is-the-fed-ready\/#More_from_Peter_Morici\" >More from Peter Morici<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/peter-morici-digital-dollars-are-coming-but-is-the-fed-ready\/#Peter_Morici\" >Peter Morici<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Peter Morici: Digital dollars are coming, but is the Fed ready?<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Fully_digital_currencies_will_be_cheaper_more_secure_and_more_inclusive_than_paper_currency_and_checks\"><\/span>\n  Fully digital currencies will be cheaper, more secure and more inclusive than paper currency and checks<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\" role=\"region\" aria-label=\"article body\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000512114\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000512114\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Americans will have\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/opinion\/articles\/2021-02-25\/fed-s-digital-dollar-would-look-nothing-like-bitcoin\" class=\"icon none\">digital dollars<\/a>\u00a0accessible through smartphones within a few years. Paper money and checkbooks won\u2019t go away completely but the overall benefits of digital money are compelling.<\/p>\n<p> Most of us already receive paychecks, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security benefits and some other payments digitally through direct deposit. We can swap those funds for paper currency or write checks but most transactions are made through credit and debit cards and electronic transfers.<\/p>\n<div class=\"paywall\">\n       Usually, payers and payees have accounts at different commercial banks, and those banks have accounts at the Federal Reserve.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"The_payments_system\"><\/span>The payments system<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Payments from households and businesses first move through their bank\u2019s internal accounting and affiliated credit-card systems.\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-09-10\/crack-on-with-digital-fx-ex-ecb-official-tells-central-banks\" class=\"icon none\">Payee\u2019s banks make a claim against the payer\u2019s bank<\/a>, and the Federal Reserve redistributes funds from the payer\u2019s bank to the banks where landlords, merchants and suppliers have accounts.\u00a0\u00a0<\/p>\n<p>It\u2019s mostly digital these days\u2014even paper checks are photographed to speed things along\u2014and really constitutes a crude, indirect digital currency.\u00a0The system is multilayered, expensive and with many links, offers lots of opportunities for hacking and fraud.<\/p>\n<p>Bank-sponsored credit cards charge\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.creditdonkey.com\/credit-card-processing-fees.html\" class=\"icon none\">1.5% to 3.5% on merchants to process payments<\/a>\u00a0to cover theft, consumer defaults and still make a nice profit.\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.fundera.com\/blog\/debit-card-processing-fees\" class=\"icon none\">Fees are smaller but still substantial for debit cards<\/a>\u00a0and other direct electronic payments, mostly owing to the absence of credit risk and regulation.<\/p>\n<p>The\u00a0essence of a digital currency\u00a0is that everyone could have an account directly at the Federal Reserve. We could pay merchants and monthly bills directly through Fed payments systems with fewer fees.<\/p>\n<p>Eliminating layers and most fees could save consumers billions of dollars and shorten payment time from days to hours\u2014perhaps minutes. With <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ropriate encryption and by eliminating multiple layers of transactions, it would be more secure.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Payments_system\"><\/span>Payments system<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Already the central bank is planning to roll out a\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.federalreserve.gov\/paymentsystems\/fednow_about.htm\" class=\"icon none\">FedNow Service<\/a>\u00a0that would permit instantaneous transfers among commercial bank accounts. All that is required is to establish a framework for ordinary individuals to establish similar accounts and the digital dollar would be with us.<\/p>\n<p>Households and businesses would not have to keep their money at banks. The same goes for the federal, state and local governments who have bank accounts to process tax collections and payments of benefits and for goods and services. That has banks\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-03-22\/federal-reserve-s-digital-dollar-momentum-worries-wall-street\" class=\"icon none\">sufficiently agitated<\/a>\u00a0enough to raise\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/bpi.com\/legal-authority-to-issue-a-u-s-central-bank-digital-currency\/\" class=\"icon none\">distracting questions<\/a>\u00a0about the legality of digital currencies.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>However, the essential role of banks would not change. Folks who want to carry credit-card balances or borrow for homes, cars and run businesses would still rely on them, but banks would have to pay more interest than the paltry sums they now offer to entice us to move money from Fed wallets to accounts with them.<\/p>\n<p>The Constitution authorizes the federal government to issue paper currency but it was written before Thomas Edison. If individual accounts at the Federal Reserve are illegal, then so must be banks\u2019 accounts with the central bank and the entire banking system, because in all their essential characteristics those accounts function as money.<\/p>\n<p>Individual accounts at the Federal Reserve could make the most basic financial services\u2014accounts to receive paychecks, make ordinary payments and access to cash through ATMs everywhere\u2014much more accessible to underserved, poorer Americans.<\/p>\n<p>The\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.fastcompany.com\/90683033\/the-post-office-is-finally-going-to-try-out-being-a-bank\" class=\"icon none\">Postal Service is experimenting with once again offering banking services<\/a>. Local post offices could provide counter services in places where banks will not go. However, other than for accessing paper currency, few counter services will be needed\u2014paper checks would be virtually obsolete.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Government_payments\"><\/span>Government payments<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>If every American had a Federal Reserve account, then\u00a0distributing governments\u2019 benefits would be much easier.\u00a0Especially at times of crisis like the pandemic, stimulus checks could get out much more quickly.<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/opinion\/articles\/2021-09-13\/digital-currency-highways-could-cost-banks-60-billion\" class=\"icon none\">International funds transfers often\u00a0impose\u00a0even greater costs<\/a>\u00a0than the credit and debit card systems but if\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bis.org\/publ\/bppdf\/bispap115.pdf\" class=\"icon none\">central-bank digital currencies protocols<\/a>\u00a0were\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bis.org\/publ\/othp39.pdf\" class=\"icon none\">harmonized<\/a>, the working poor could send money to relatives abroad\u2014and the corner hardware store to foreign suppliers for imported items\u2014at much lower cost.<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/china-envisions-its-digital-currency-future-with-lotteries-and-a-years-worth-of-laundry-11609066819?mod=article_inline\" class=\"icon none\">China<\/a>\u00a0has\u00a0already\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/china-rolls-out-pilot-test-of-digital-currency-11587385339?mod=article_inline\" class=\"icon none\">conducted pilot studies<\/a>\u00a0for a digital currency\u2014as have\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/cbdctracker.org\/\" class=\"icon none\">several other countries<\/a>. The\u00a0United States risks the status of the dollar<br \/>\n        BUXX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210673925\/realtime\" class=\"negative\">-0.11%<\/bg-quote><br \/>\n      \u00a0as the primary reserve currency if it lets China\u00a0or the\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-07-14\/ecb-approves-next-stage-of-digital-euro-with-investigation-phase-kr3f2lqn?cmpid=BBD110521_BRUS&amp;utm_medium=email&amp;utm_source=newsletter&amp;utm_term=211105&amp;utm_campaign=brussels\" class=\"icon none\">European Central Bank<\/a>\u00a0pioneer an internationally convertible, secure digital currency.<\/p>\n<p>Fed Chairman Jerome Powell has\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/feds-powell-says-in-letter-to-congress-fed-not-creating-digital-currency-11574356188?mod=article_inline\" class=\"icon none\">dragged his feet<\/a>, saying\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/fed-prepares-to-launch-review-of-possible-central-bank-digital-currency-11633339800?mod=article_inline\" class=\"icon none\">it\u2019s better to get it right than to be first.<\/a>\u00a0It seems they don\u2019t read about \u201cfirst mover advantage\u201d at law school, but\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2021\/05\/24\/feds-lael-brainard-pushes-digital-dollar-as-central-bank-currency-race-heats-up.html\" class=\"icon none\">Vice Chairman Lael Brainard sees the economic and security benefits<\/a>.<\/p>\n<p>Digital dollars are an imperative not a choice. Elevating Brainard to vice chairman could accelerate progress.<\/p>\n<p><strong><em>Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.<\/em><\/strong><\/p>\n<h6><span class=\"ez-toc-section\" id=\"More_from_Peter_Morici\"><\/span>More from Peter Morici<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Republicans should force Biden to spend less in coming debt-ceiling showdown<\/p>\n<p>Powell and Biden are rolling the dice on inflation and growth<\/p>\n<p>Instead of standing up to Russia and China, Biden appeases them<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Peter Morici\",\"subhead\":\"The Wall Street Journal\",\"list\":[,{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/pmorici1\",\"text\":\"@pmorici1\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:contributors@marketwatch.com\",\"text\":\"contributors@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Peter_Morici\"><\/span>Peter Morici<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-77D0-72ED2B03A7DB%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Peter Morici: Digital dollars are coming, but is the Fed ready?&#8221; Fully digital currencies will be cheaper, more secure and more inclusive than paper currency and checks Americans will have\u00a0digital dollars\u00a0accessible through smartphones within a few years. Paper money and checkbooks won\u2019t go away completely but the overall benefits of digital money are compelling. Most&#8230;<\/p>\n","protected":false},"author":1,"featured_media":378100,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-447564\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-378099","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/378099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=378099"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/378099\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/378100"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=378099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=378099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=378099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}