A national digital identity framework is key to unlocking equitable financial technology.

When the COVID-19 pandemic hit the United States, the U.S. Congress quickly approved the CARES Act to—among other things—send emergency “economic impact payments” to struggling Americans. Millions of people, however, had to wait for months to cash physical checks that arrived through the mail, and millions more never received their stimulus payments at all.

An early version of the CARES Act included a provision to create “digital dollars” issued by the Federal Reserve to speed up the delivery of future government-to-person payments at scale. But creating a digital currency would not, on its own, solve the challenge of disbursing government aid to individual citizens. The Internal Revenue Service (IRS) would also require a digital infrastructure to verify the identity of individuals receiving the payments before the agency could…

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