Memo: The Inclusive Value Ledger - Digital Dollars and Digital Platforms for Digital Public Banking

By Robert Hockett Edward Cornell Professor of Law at Cornell Law School

Since Facebook announced Libra, its proposed “global crypto-currency,” a bit over a year ago, central banks and monetary authorities worldwide have accelerated their efforts to develop central bank digital currencies (CBDCs). Sweden and China, for example, were nearly ready to test their own proto-CBDCs even before last summer. Thanks to CBDCs’ promise to make transactions more efficient and expand means of publicly banking to presently unbanked and under-banked households, businesses, and individuals, other countries were not far behind. Public support for the prospect in the United States is already significant.

The sudden slowdown in both the manufacturing and service sectors of our economy wrought by the Covid pandemic beginning in early March of this year makes developing CBCDs all the more urgent. The lockdown and social distancing measures necessitated by the pandemic are antithetical to these forms of productive activity, and hence to the flow of pay for such activity because labor is largely furloughed—at least in sectors outside the so-called “knowledge economy,” which allows for remote work. State, local, and national economies everywhere are thus confronted, in ways they were not during the crisis of 2008 and after, by simultaneous shocks to their supply-sides and demand-sides alike—supply-side thanks to the slow-down, and demand-side thanks to the furloughs. 

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