The Electronic Transactions Association (ETA) today welcomes the Federal Reserve Board’s discussion paper Money and Payments: The U.S. Dollar in the Age of Digital Transformation. The paper discusses and seeks comment on whether and how a Central Bank Digital Currency (CBDC) could improve the current domestic payments system.
“We welcome the discussion paper from the Fed and are pleased that it was guided by principles that are consistent with ETA’s own, including whether a CBDC would improve upon the existing robust, fast, and secure payments system,” said Jodie Kelley, CEO of ETA. “We look forward to continuing to work with policymakers on the possible creation of a CBDC.”
As payments experts, ETA has long advocated for an approach to CBDCs that considers potential benefits and unintended consequences, and includes an appropriate regulatory framework that is tailored to risk. To this end, ETA released “7 Guiding Principles for CBDC” against which any proposed CBDC should be measured. As the federal government assesses a potential CBDC it should, consistent with these principles, ensure that any proposal best serves the needs of consumers, furthers financial inclusion, preserves and strengthens the financial system, and ensures that consumers continue to have access to a robust and innovative array of secure banking and payment options.
As policymakers and the Federal Reserve consider implementing a CBDC, ETA supports a CBDC that advances these 7 guiding principles:
- Advances Innovation
- Provides the Right Tool for the Job
- Ensures Private Sector Participation
- Allows for Interoperability
- Encourages Open Acceptance
- Strengthens Consumer Protection
- Utilizes Regulation Tailored to the Risk Profile of the Participant