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Howell jackson & Timothy Massad, The Treasury Option: How the U.S. Can Achieve the Financial Inclusion Benefits of a CBDC Now, Brookings (Mar. 10, 2022).


Abstract: We propose that the U.S. Treasury Department create “Treasury Accounts” as a means of improving access to financial services for many Americans. These would be digital accounts that would facilitate distribution of federal benefits and provide low cost, no-frills payment services. Treasury could create these accounts under existing statutory authority. In addition, Treasury’s substantial experience, dating back several decades, in devising benefit distribution and payment service programs for individuals can serve as the foundation for our proposal. Treasury Accounts could make it easier for those who are underserved by today’s banking system to both open and sustain an account. We propose a limit on account size and rollovers to private accounts to minimize disintermediation of bank deposits. As the public debate heats up over whether to create a U.S. central bank digital currency (CBDC), we explain why Treasury is better suited, at least in the short term, to provide retail accounts than the Federal Reserve, and why this proposal would be a faster, easier way to achieve some of the primary objectives of a CBDC.