WASHINGTON–The Independent Community Bankers of America (ICBA) has issued a statement expressing its strong opposition to the establishment of a U.S. central bank digital currency (CBDC).
In a comment letter to the Federal Reserve, the ICBA said a U.S. CBDC would introduce “significant privacy and cybersecurity risks” into the nation’s monetary system and disrupt U.S. banking stability.
“A U.S. CBDC appears to be a solution in search of a problem,” stated ICBA President and CEO Rebeca Romero Rainey. “While ICBA supports the Federal Reserve’s efforts to ensure the U.S. payments and monetary system remains modern and competitive, a U.S. CBDC would introduce costs and risks far exceeding any benefits to consumers, small businesses and the broader economy. Because of community banks’ critical role in the financial system, we urge the Fed to consider our staunch opposition to a U.S. CBDC.”
The Points Raised
In its comment letter responding to the Fed’s consultation paper on a U.S. digital dollar, the ICBA said:
- A U.S. CBDC would obstruct the ability of banks to take deposits and make loans, pose privacy and cybersecurity risks, provide a gateway to direct-to-consumer Fed accounts, and damage the Fed’s ability to conduct monetary policy, among other risks.
- A U.S. CBDC would not yield benefits more effectively than alternative methods, which the Fed states is a prerequisite to creating a CBDC.
- Alternatives—including deposit accounts and faster payments options—can more effectively achieve the Fed’s policy goals.
- As financial intermediaries and the nation’s leading small-business lenders, community banks’ access to deposits and ability to lend funds to support economic growth and development would be dramatically affected by the creation of a competitively advantaged CBDC.
- The Fed should not proceed without explicit statutory authorization and oversight from Congress because the authority to issue a CBDC does not exist under current law.
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