The costs of any central bank digital currency (CBDC) will outweigh its benefits, NAFCU told the Commerce Department.
NAFCU wrote a letter to the DoC’s Commerce’s International Trade Administration (ITA) in response to its request for comment (RFC) on digital assets, as directed by President Joe Biden’s Executive Order on Ensuring Responsible Development of Digital Assets. Through the RFC, the Commerce Department requested feedback on potential impacts that a central bank digital currency (CBDC) would have on the U.S. digital assets sector, to what extent, and more.
With respect to the RFC’s solicitation for input on a CBDC, NAFCU’s Andrew Morris reiterated NAFCU’s position that the costs would outweigh the benefits – as the association has communicated previously to the Federal Reserve on the same topic – and namely, that superior alternatives exist for accomplishing the same objectives.
Illustrating Point
Concerning digital asset regulation, Morris drew attention to private and public sector payments initiatives to illustrate the availability of less disruptive alternatives for achieving payments improvement. On the topic of financial inclusion, Morris highlighted the valuable role credit unions already play in terms of reaching underserved populations and recommend – as an alternative to CBDC – ways to support credit union engagement with these communities.
In addition, the letter addressed other questions presented in the RFC, relating primarily to issues of global competitiveness, by offering several high-level principles to incorporate in any future “framework.”
Three Principles
According to NAFCU, these principles include:
- A level playing field for credit unions, banks, and other financial companies seeking to engage with digital asset technologies
- The application of consumer protection laws to entities facilitating consumer engagement with digital assets
- Support for responsible innovation within the credit union industry
Support for Consistency
“With respect to fostering U.S. competitiveness in the broader arena of digital asset related activities, NAFCU encourages the ITA and Commerce to support a level playing field, the consistent application of consumer financial protection law, and the encouragement of responsible credit union innovation,” concluded Morris.
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