The Independent Community Bankers of America (ICBA) is urging the federal government to conduct research on the effects of digital assets on community banks and their customers.
In a letter to the White House Office of Science and Technology Policy, ICBA President and CEO Rebeca Romero Rainey discussed how academic and government research can help policymakers assess the potential effects of digital assets. She added that crypto assets, nonbank stablecoins, decentralized finance, and a potential U.S. central bank digital currency pose significant risks to community banks, consumers, and the financial system.
“Community banks are the bedrock of the nation’s financial system and economy,” Rainey said. “As the government considers how to develop its agenda for digital assets, ICBA and its members call on the Office of Science and Technology Policy to prioritize research on the current and potential impacts of digital assets on community banks and the communities they serve.”
In the letter, Rainey called on the administration to assess the potential economic and social consequences that could result from a digital dollar. In addition, she asked the office to focus research on how the expansion of nonbank stablecoins and DeFi would specifically affect community banks and their communities. Also, Rainey recommended that the office perform additional research on blockchain technology and other potential regulatory or legal solutions that could mitigate the myriad threats.
Finally, she asked them to examine how instant payments facilitated by the Federal Reserve’s FedNow Service can address many of the issues that digital asset advocates claim can only by solved by a CBDC.