The COVID-19 emergency has led to unprecedented changes in a short time period. The government has passed several pieces of legislation to help businesses and the American public get through this difficult time.
Several other major pieces of legislation are in the works, including an expansion of the Paycheck Protection Program, which provides forgivable loans to small businesses, and several different bills that would provide a second stimulus payment.
One of these proposals is the Automatic BOOST to Communities (ABC) Act, which was introduced by Congresswomen Rashida Tlaib (D-MI) and Pramila Jayapal (D-WA).
The ABC Act would provide a $2,000 one-time payment to every person in America, including dependents, and would follow that up with an additional $1,000 per month for up to a year after the COVID-19 emergency ends. You can read more about the specifics of the proposal in this overview.
U.S. Debit Cards Managed by the Treasury
The ABC Act proposal is interesting for reasons other than the possible second stimulus payments. It proposes the payments be distributed via pre-paid U.S. Debit Cards managed by the U.S. Treasury.
These U.S. Debit Cards could be used just as you would use any debit card - for in-store purchases, online purchases, or to withdraw cash from ATMs.
Sending out millions of these debit cards would require the U.S. Treasury to invest in the underlying technology and infrastructure to support the effective distribution of these debit cards, which leads us to the next point.
The Introduction of a Digital U.S. Currency by 2021
This proposal mentions the possibility of using the underlying infrastructure required to implement the U.S. Debit Card system to create a “digital public currency wallet system,” or a digital currency based on the U.S. dollar. The proposal suggests this could happen as soon as 2021.
While many countries such as Russia and Sweden have investigated the efficacy of setting up a digital currency system, or cryptocurrency, no major country has yet made the transition to a legal tender digital payment system.
In a recent article on this site, Forbes Contributor Jason Brett discussed the possibility of a digital U.S. currency with Congresswoman Tlaib, one of the authors of the ABC Act.
$1 Trillion Platinum Coins
The ABC Act would be paid for by minting two $1 trillion platinum coins, and additional coins as needed.
While most non-coin collectors have never even heard of U.S. platinum coins, they are actually well-known among serious numismatists. The U.S. Mint already produces several platinum collectible coins, including the $100 coin seen here. Incidentally, the $100 face value is currently the highest denomination for a U.S. legal tender coin.
Of course, the $1 trillion coins, if minted, would not be designed to be spent. They would simply be the method for funding the ABC Act without creating new debt.
Will Any of These Come to Fruition?
At this stage, the ABC Act is still just a proposal. Not every proposal makes it beyond the initial vetting process, and those that do are frequently modified. So while it is possible we will see some of these come to fruition, it’s also possible that this proposal will not go beyond this stage.
You can learn more about this proposal here, or read the full text here.