This could be an easier way to get money to people, if the second stimulus check is approved.
The Financial Services Committee of the United States House of Representatives had a virtual hearing where they talked about making payments to personal FedAccount accounts, in case a second stimulus check is approved, according to Fast Company.
FedAccounts would be digital accounts that would be made for every American, maintained by a Federal Reserve bank.
These accounts consist of ‘digital dollars’ and offer instant payments, higher interest than ordinary bank accounts, and are fully backed by the government, Morgan Ricks, a professor at Vanderbilt University School of Law, explained at the hearing. already mentioned, as recorded in a document on the Congress website.
These accounts are currently restricted to banks and certain financial institutions, as well as government entities.
Therefore, what is now proposed is that Congress order the Federal Reserve to grant this type of account to the general public. The FedAccount program would put ‘digital dollars’ in those accounts so that people can use them as they see fit.
These FedAccounts would offer all the functionality of ordinary bank accounts except overdraft coverage.
In addition, they would come with debit cards for payments at points of sale and access to ATMs. Direct deposits and bill payments could also be made online.
Account holders could access their accounts on the Internet or through a mobile phone application. Monthly statements would be sent by email or hard copy, and the Federal Reserve would charge no fees or impose any minimum balance requirements.
The reason this digitales digital dollar ’option is being considered is that the delivery of the stimulus payments that were approved earlier this year as part of the CARES Act had some problems, from check fraud until the recipients accidentally throw the debit cards in the trash, because they mistaken them for regular mail.
For these reasons, the problems of getting stimulus money to eligible citizens – if approved – would be avoided with the FedAccounts and their digital dollars.
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