In an effort to advance the United States into the digital age, the White House has announced a presidential executive order requiring all federal disbursements and receipts to be processed electronically. As reported yesterday, the decision marks a shift away from paper-based checks and money orders that have long been associated with higher risks of fraud, loss, and inefficiency. The move towards electronic payments is aimed at reducing costs and bolstering security for transactions involving what is essentially America's bank account—the United States General Fund.
The necessity for change, as highlighted by the White House, arises from the clear fact that Treasury checks have been 16 times more likely to encounter problems, such as being reported lost or stolen, returned undeliverable, or altered when compared to electronic funds transfer (EFT). In addition to minimizing risks, this change addresses the increasing financial burden on American taxpayers, who as of Fiscal Year 2024, shouldered more than $657 million in costs maintaining the old system. This transition aims to improve operational efficiency while strengthening defenses against financial misconduct, which has become more prevalent in an era still dealing with the lasting effects of mail theft from the COVID-19 pandemic.
The executive order, published by the White House, outlines that the shift to electronic payments will comply with applicable law, stressing that this move toward digitization is not a precursor to the creation of a Central Bank Digital Currency.
Amid this significant change, some are concerned about the challenges faced by individuals less familiar with digital payment systems, particularly among older generations who have traditionally relied on conventional banking methods. However, the mandate reflects a firm federal belief that the era of paper-based payments is ending, with a digital shift offering a more secure, cost-effective, and efficient way to handle the nation’s financial transactions. With this move, the U.S. aligns with other countries at the forefront of the transition toward an increasingly cashless society, a change that is both inevitable and indicative of our growing dependence on technology to manage the flow of currency within our financial system.
