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CUs: Submit feedback to NAFCU on the Fed’s digital currency discussion paper
NAFCU Monday sent members a Regulatory Alert breaking down the Federal Reserve's public discussion paper that examines the pros and cons of a potential U.S. central bank digital currency (CBDC) and invites comment from the public on the matter. Of note, this move from the Fed marks the first step in the discussion of whether and how CBDC could potentially improve the safety and effectiveness of the domestic payments system.
In addition, the paper notes that a CBDC would be a liability of the Federal Reserve that should "complement, rather than replace, current forms of money and methods for providing financial services."
Through the Regulatory Alert, NAFCU highlights:
- the paper summarizes the current state of the domestic payments system and discusses the different types of digital payment methods and assets, including stablecoins and other cryptocurrencies;
- the Fed suggests that a CBDC could support faster and cheaper payments – including cross-border payments – and expand consumer access to the financial system; and
- the Fed does not intend to proceed with issuance of a CBDC without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing law.
NAFCU outlines how this topic impacts credit unions and offers several questions to consider when providing feedback.
Comments on the request for comment are due to NAFCU March 31 and can be submitted through the alert; comments are due to the Federal Reserve May 20.
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