As the United States investigates the prospect of implementing a central bank digital currency (CBDC), a prominent trade organisation has expressed opposition to the concept.
The National Association of Federally-Insured Credit Unions (NAFCU) told the U.S. Commerce Department in a letter dated July 6 that the expense of producing a CBDC surpasses the purported advantages of the currency.
NAFCU observed that, in lieu of a CBDC, there are other options that may achieve the same objectives, such as alternate payment methods and encouraging financial inclusion.
CBDC alternatives
Andrew Morris, a member of the NFCU’s senior research council, said both private and public funding methods might be considered for the sector’s expansion. Regarding financial inclusion, the official suggested that the government may partner with credit unions to reach more individuals given their community involvement.
Notably, the organisation had previously sent a letter to the Federal Reserve on the launch of CBDCs, in which the writers expressed concern that the currency may possibly undermine financial stability.
Preserving American competitiveness
Market analysts consider the inability to build CBDCs as an impediment to the United States maintaining globally competitive. NAFCU suggested, however, that the United States should be governed by principles that provide a fair playing field for financial institutions when interacting with cryptocurrencies.
In addition to promoting responsible innovation in the credit union sector, the organisation said that authorities should apply client safeguards to enterprises that encourage the usage of digital currencies.
Morris urged the ITA and Commerce to support a fair playing field, the consistent implementation of consumer financial protection legislation, and the promotion of responsible credit union innovation in order to promote U.S. competitiveness in the larger arena of digital asset-related activities.
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