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The Pandemic Has Shown That We Need A Public Option For Banking Services

The Pandemic Has Shown That We Need A Public Option For Banking Services

The Pandemic Has Shown That We Need A Public Option For Banking Services2020-05-18PopularResistance.Orghttps://popularresistance-uploads.s3.amazonaws.com/uploads/2020/04/publicbank-e1589818416424.jpg200px200px

As marginalized families without bank accounts struggle to get stimulus checks, it’s time to fix the rusty pipes of our inequitable financial system.

The COVID-19 pandemic response has shown that the very foundations of our economy are shaky, fragile, and — for some of us — downright dangerous. We’re once again watching working people, especially working people of color, bear the brunt of the fallout. Meanwhile, big companies traded on the stock market took two-thirds of the money meant to bail out small businesses.

But in getting relief out, it’s also become clear that we have a plumbing problem. We are forced to rely on the banks as middlemen to deliver government assistance. Some of them are seizing our stimulus payments to pay themselves. And as big banks have exited the business of serving poor people, 1 in 4 U.S. households are now underbanked or unbanked. This has predictably led to marginalized communities and households waiting in distress for life-sustaining stimulus, simply because they lack access to a bank account.

The good news is that there’s another way. The pandemic has shown that we need a public option for basic banking services. Legal scholars Morgan Ricks, John Crawford, and Lev Menand have called for the Federal Reserve System to directly offer accounts to all U.S. citizens, residents, and small businesses. Today, only privileged banks and governmental entities are allowed to have these high-interest, low-fee accounts. But the Fed could easily offer the same option to everyone and provide better consumer safeguards than Wall Street, as well as higher interest, faster payments, and complete deposit protection. As a recent New York Times editorial endorsing FedAccounts for getting out stimulus payments put it: “Stop Dawdling. People Need Money.”

The Fed could also work with USPS to broaden its reach — strengthening our postal system at a time when it is facing continued attacks from predators. As our friends at the Roosevelt Institute have put it, Fed Accounts For All could make sending money as easy as transferring funds through Venmo or Paypal — but with Fed Accounts For All, everyone could do it, without relying on Wall Street (or Silicon Valley).

Even after the pandemic, Fed Accounts For All could make it easier to prioritize assistance through more direct fiscal policy, avoiding ongoing issues with delayed funds, debt collection, and frozen bank accounts. A public option for basic banking services, and an improved, publicly accountable payments system, are necessary parts of a recovery infrastructure that works for everyone.

House Financial Services Chair Maxine Waters introduced legislation to create FedAccounts, and the Ranking Member on the Senate Banking Committee, Sherrod Brown, also introduced a bill to use FedAccounts. Their proposals would ensure that no one needs to use an expensive check casher to access their stimulus payment because the Fed in partnership with the U.S. Postal Service could deliver the payments to every household.

These bills were incorporated into the House version of the CARES Act in March. Unfortunately, the Senate stripped this provision out of the bill that passed. But it’s not too late for them to get it right in the next stimulus bill. Our unbanked and underbanked neighbors are depending on it.

Raúl Carrillo is a Fellow at the Americans for Financial Reform Education Fund. Follow him @RaulACarrillo.

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Coindesk News

IBM Blockchain to Offer Decentralized Smart Contract Option

IBM is upgrading its enterprise blockchain solution to provide clients with a new decentralized governance option that will allow transaction parties to propose and amend smart contract parameters.

The blue-chip IT firm said last week that the IBM Blockchain Platform would carry over the changes in Hyperledger Fabric 2.0 – its base layer – claiming it “vastly improves” overall security and usability.

As well as improving performance and data privacy, IBM said in a blog post that the upgrade would completely change the platform’s smart contract governance.

“IBM Blockchain Platform will support Hyperledger Fabric 2.0 and continue to add additional capabilities around the new decentralized smart contract lifecycle management and other new improvements,” IBM said in its blog post. “In addition, the platform will allow the user to choose which version of Fabric to deploy and to migrate from one version to another.”

Although IBM says it is “full steam ahead” with the Hyperledger Fabric 2.0 integration, it didn’t provide a timeframe for when it expects to go live.

On the existing Hyperledger Fabric 1.0, smart contract governance is largely centralized. The ability to propose new parameters is reserved for one entity, while all other parties face a binary choice of either accepting them as they are or refuse them entirely and take themselves out of the ongoing transaction.

While they can still opt to put one entity in control of the parameters, a document issued by the Linux Foundation – the open-source tech consortium that launched the upgrade – says Hyperledger Fabric 2.0 adds a decentralized model where multiple parties can propose and amend parameters before they become active on the transaction channel.

The protocol upgrade also means that rather than the proposing party simply activating the new parameters at whim, a quorum of other transaction parties now needs to explicitly approve the upgrade beforehand.

Since IBM launched its blockchain platform in May 2017, clients – generally businesses like the digital platform we.trade – have been able to pick and choose, buffet-style, the distributed ledger features that go along with their own individual requirements.

That clients can now choose a pre-packaged decentralized governance solution appears to play right into “Big Blue’s” playbook.

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Daily Beast News

Team Trump Considers Drive-In Theater Campaign Rallies After Coronavirus Destroyed His Preferred Option

President Donald Trump is thirsting to hold campaign rallies again. And among his campaign and White House advisers, a possible solution has been discussed that could allow for such MAGA gatherings even in the midst of a global pandemic: the mostly defunct, rural tradition of the drive-in movie theater.

According to three people familiar with the preliminary discussions, Trump aides and operatives have spent weeks exploring alternatives to the standard Trump 2020 rally that could allow for social distancing while still allowing for a modest number of attendees. Much of the focus has been on sprawling outdoor venues, such as large fields. And one of the top ideas for this coronavirus-era workaround that is currently being floated would rely on repurposing drive-ins for a political gathering.

Under such a scenario, Trump-loving attendees would roll up in their cars and be required to mostly remain in their respective vehicles as the president addressed them in-person from the outdoor stage.

One of the three sources, a senior administration official, said they were planning on pitching it directly to President Trump as early as next week. It is not clear if Trump, who has made no secret about his love of packed arenas, has privately weighed in on the drive-in theater idea yet. But he’s indicated that he wants to get back on the road as soon as possible.

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