In this report, we assess today’s HFSC fintech task force hearing considering legislation (H.R. 2650) to prohibit retail businesses from refusing or penalizing cash payments. While Chairman Lynch (D-MA) said that cash should remain an option for consumers, he did not directly endorse the legislation. Because payment-system regulation is tied to bank regulation, the chairman does worry that a new blockchain-based payment system without intermediaries would disintermediate banks, thus rendering regulation ineffective. In a surprising endorsement of a larger Fed role, Ranking Member Emmer (R-MN) countered that CBDC is preferable to requiring retailers to accept cash; Rep. Hill (R-AR) called for a regulated block-chain-based payment system rail that can be accessed by both banks and nonbanks.
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