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NAFCU supports effort to prevent CBDC ahead of HFSC markup
Ahead of the House Financial Services Committee’s (HFSC) markup of a variety of bills, including legislation to prevent the creation of a Central Bank Digital Currency (CBDC), NAFCU Vice President of Legislative Affairs Brad Thaler wrote to the committee to reiterate the association’s opposition to creating a central bank digital currency (CBDC) and support for the Committee’s efforts. In the letter, Thaler explained that allowing the Federal Reserve to offer a CBDC to consumers would be a “radical expansion” of the Fed’s mission.
Additionally, he noted that a CBDC could still be seen as a safe haven in times of crisis and would have serious consequences on the liquidity of financial institutions, especially credit unions, if consumers substitute commercial deposits for CBDC. Thaler remarked that the costs of creating a CBDC would likely outweigh the benefits while distracting the Fed from its mission: achieving both stable prices and maximum sustainable employment.
NAFCU will continue to express its opposition to the creation of a CBDC. The association has argued that credit unions represent a superior and safer alternative for advancing financial inclusion goals and promoting affordable access to payments.
Stay tuned to NAFCU Today for the latest out of Washington.