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Widespread unemployment and economic turmoil as a result of the coronavirus pandemic mean people are looking for government relief fast, which some say could open up the possibility for a new approach: digital currency.
But there are many hurdles to overcome, including adopting the infrastructure and growing trust in the system.
Since Congress passed the largest economic relief bill in U.S. history last month, direct payments to Americans have been trickling out. The most vulnerable Americans could wait a long time for their funds, though, especially people without bank accounts.
About a quarter of households either did not use banks or used financial services outside of the banking system in 2017, according to the latest survey from the Federal Deposit Insurance Corporation (FDIC). More than half of "unbanked" households surveyed said they did not have enough money to start an account.
As chairwoman of the House Financial Services Committee, Rep. Maxine Waters, D-Calif., drafted a provision in an early version of the relief package that called for digital "wallets" for people without bank accounts. The measure did not make it into the final legislation.
Digital currency could also cut the lag time of mailing a check or even transferring funds into a traditional account. Rep. Stephen Lynch, D-Mass., said the COVID-19 crisis is showing the country that being able to transfer money virtually means they get help faster.
People who are relying on the paper process for their small business loans or $1,200 payments could be waiting months, he said, which could give people an excuse to look toward the future.
"You look at the younger generation, the way things are moving here, it provides an even greater advantage if you look out into future years, and I think it's something we're going to have to grapple with," said Lynch, who chairs the House financial technology task force.
Lynch said the U.S. banking system is older and more reliable than some of the countries with less developed economies who have moved forward with creating digital coins. That's why the banking system has more to lose if going digital opens up vulnerabilities to cyberattack.
Testing a currency on a smaller scale first could help ease some of the political resistance, he said.
"I do think we should encourage our institutions to look at that type of model where we might be able to experiment with some of this stuff without great risk," he said.
Vipin Bharathan, a digital transformation consultant, said allowing people to receive money immediately from the federal government has logistical issues. But these are extraordinary times, he noted.
"The atmosphere is such that things that seemed far-fetched are now in the conversation," said Bharathan, who chairs a group working on a digital coin that could be used by central banks.
One challenge is that the communities who are the most vulnerable — and potentially most in need of digital currency — may even lack access to computers or smartphones.
Plus digital wallets, or software programs that store passwords to access funds, have often been the source of cryptocurrency hacks that have lost customers millions of dollars. The unbanked may not have the technology to keep their funds safe, Bharathan said.
Regulation of digital currency has also been a concern. Facebook's proposed Libra coin faced congressional scrutiny last year when members raised questions about Facebook's trustworthiness after its issues with user privacy and misinformation. Facebook has since scaled back the project and decided to ditch the idea of becoming a global financial payment system after several of its supporters abandoned it last year.
Bharathan said the United States might be years away from developing the necessary infrastructure and helping people adapt to digital currency, but it might be a huge help for the next economic catastrophe.
"Distribution is going to be the key. The payment systems, the wallets. So those things as they mature will definitely help the next time there's this problem," he said.
Bob Steen, CEO of a community bank in Iowa, testified before Congress last year in favor of a Federal Reserve project to develop a real-time payment system. He said the U.S. needed such a system to stay competitive with other countries. But now he thinks it may be harder to make progress on the FedNow project because of the concentration on saving the flailing economy.
"I wouldn't want to suggest it's at a standstill, but it's not the priority right now. I think they're trying to keep people alive," he said.
Steen said the technology exists that would allow Americans to receive fast payments, but there is a risk that people who have never been involved with banks before would fear the new technology is more of the same.
"The population is just wary of banks. So that's one barrier to getting adoption, convincing folks that it will be OK," he said.
Meredith Roaten is an intern on NPR's Washington Desk.
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