Lawmakers in New York have proposed a public electronic banking system that would essentially function like payment service Venmo, with the purpose of including more people in the economy in an attempt to stimulate growth, according to Vice. The issue is that many Americans — an estimated 14 million — are excluded from the formal banking system, and are forced to turn to predatory payday loan organizations or check-cashing stores, which take a percentage of money earned — something that doesn’t happen if a person has a bank account.
The proposal, called the Inclusive Value Ledger, was put forth in November by New York State Assemblyman Ron Kim, Senator Julia Salazar and Cornell Law Professor Robert Hockett. If passed, it will be the first banking platform owned by the public, and will be a way to exchange goods and services throughout the state.
“The fact that many of the world’s central banks and monetary authorities are now planning to upgrade their national payments systems, even as social media monopolies threaten to ‘go live’ with their own rent-extractive payment platforms and associated currencies, renders the present an especially opportune — if not indeed urgent — time for all units of government to develop and offer this indispensable public utility to their full residential and business publics without exception,” Hockett wrote.
Kim said that the proposal has the means to truly change the way people think about money in the state.
“I believe that our proposal, the Inclusive Value Ledger, has the potential to be truly revolutionary,” Kim said. “The creation of a free public savings and payment platform that all New Yorkers can use — not only to pay for goods and services, but also to transfer money directly to each other through — could fundamentally reshape New York into a fairer, healthier, wealthier and more inclusive place for all.”