On January 9, 2020, Lawmakers in New York have proposed a statewide cryptocurrency and blockchain-based banking platform to encourage the recirculation of money in low-income communities.
The project – pitched as a “public Venmo” – was proposed by New York state assembly member Ron Kim.
Should the proposal be accepted, it would mark the USA’s first publicly-owned electronic banking platform alongside a digital currency that could be exchanged for various goods and services in the state.
The project aims to compensate residents for work that is either unpaid or underpaid. This could encompass babysitting children or caring for senior citizens.
Countrywide, about 14 million Americans lacked bank accounts in the year 2017, according to statistics from the US government’s Federal Deposit Insurance Corporation.
Ron Kim has presented a proposed bill in the NY State Assembly that would launch the new financial system, named the “Inclusive Value Ledger (IVL)”.
The system would create individual digital wallets connected to a master account, and would eventually facilitate everyday transactions.
The US looking to cater for the unbanked
Kim is not the only person thinking about how to make financial systems more accessible in the US. Mark Zuckerberg previously said that Facebook imagined Libra, its new cryptocurrency, as a viable alternative to fiat currency for millions of people without bank accounts.
But many critics argue that a privately owned company like Facebook cannot be trusted to oversee such a vital public system.
Kim argues that the IVL statewide crypto cwould encourage the recirculation of money in low-income communities.
Complementary currencies typically work on a hyper-local scale and can keep currency in one specific area to support local financial development.
Will IVL statewide crypto Get public support?
The IVL is an administered, non-extractive payment system that would enable recipients to spend freely within the New York economy without transaction fees or delays.
In effect, every business and individual in the state would be given a virtual wallet that is connected to a state government-controlled master wallet.
It is highly likely that the statewide crypto proposal will catch on quickly with locals if the proposal passes, as it would encourage the recirculation of money in low-income communities since it is a complementary currency to the US dollar.