The National Association of Federally-Insured Credit Unions (NAFCU) provided feedback to the Treasury Department on its request for comments (RFC) on the responsible development of digital assets.
The Treasury Department has requested feedback on implications of the development and adoption of digital assets, such as a central bank digital currency (CBDC), and the changes that could be expected in financial markets and payment systems.
On the subject of private sector digital asset regulation, NAFCU Senior Counsel for Research and Policy Andrew Morris conveyed his thoughts in a letter to the Treasury. In summary, Morris outlined some overriding principles that NAFCU believes should be included in any future framework.
One of those key principles is to establish a level playing field for credit unions, banks, and other financial companies seeking to engage with digital asset technologies. Also, he advocated for the application of consumer protection laws to entities facilitating consumer engagement with digital assets. Finally, he said it should include support for responsible innovation within the credit union industry.
In addition, Morris asked the Treasury to clarify that references to insured depository institutions included in the President’s Working Group on Financial Markets’ Report on Stablecoins are inclusive of federally insured credit unions.
On the matter of a CBDC, Morris reiterates NAFCU’s position that the costs would outweigh the benefits. This is a position that the association has communicated previously to the Federal Reserve and Commerce Department. NAFCU contends that superior alternatives exist for accomplishing the same objectives.
“Given the lack of clarity regarding specific CBDC parameters and design features, NAFCU does not believe that sufficient evidence exists to justify development of a CBDC, particularly when better alternatives for achieving the same purported benefits already exist,” wrote Morris. “Credit unions are well positioned to improve underserved populations’ access to affordable financial products and their efforts do not depend upon the introduction of a CBDC.”