The National Association of Federally-Insured Credit Unions (NAFCU) offered feedback to Biden administration officials on a central bank digital currency (CBDC), saying the costs would outweigh the benefits.
The feedback is in response to a request for comment (RFC) issued by the Department of Commerce’s International Trade Administration (ITA), as directed by President Joe Biden’s executive order on Ensuring Responsible Development of Digital Assets.
In his letter to administration officials, NAFCU Senior Counsel for Research and Policy Andrew Morris said superior alternatives exist for accomplishing the same objectives as a CBDC. Specifically, Morris cites private and public sector payments initiatives to illustrate the availability of less disruptive alternatives for achieving payments improvement. Further, regarding financial inclusion, Morris highlighted the role credit unions already play in terms of reaching underserved populations. He recommended — as an alternative to CBDC — ways to support credit union engagement with these communities.
In addition, Morris laid out several principles to incorporate into any future framework.
“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,” Morris wrote in his letter.