ICBA called on the federal government to support and prioritize research on the specific effects of digital assets on community banks and their customers.
Background: The White House Office of Science and Technology Policy requested feedback on how academic and government research can help policymakers assess the potential effects of digital assets. Treasury undersecretary Nellie Liang last week said the OSTP would participate in an interagency working group that the administration announced last fall and charged with advancing work on a possible U.S. central bank digital currency.
Community Bank Concerns: In a letter responding to the request for information, ICBA said crypto assets, nonbank stablecoins, decentralized finance, and an ICBA-opposed U.S. CBDC pose significant risks to community banks, consumers, and the financial system.
ICBA Recommendations: ICBA called on the OSTP to:
Conduct research to assess the full range of potential economic and social consequences that could result from a digital dollar disintermediating community banks.
Focus research on how the continued expansion of nonbank stablecoins and DeFi would specifically affect community banks and their communities.
Perform additional research on blockchain technology and other potential regulatory or legal solutions that could help mitigate the myriad threats of ransomware, sanctions evasions, and other financial crimes facilitated by digital assets.
Examine how instant payments facilitated by the Federal Reserve’s FedNow Service can address many of the issues that digital asset advocates claim can only by solved by a CBDC.
Previous: In a recent Medium op-ed, ICBA President and CEO Rebeca Romero Rainey continued ICBA’s call for policymakers to ensure new policies directed at the crypto sector fully reflect its risks. ICBA previously released polling conducted by Morning Consult indicating consumers support a regulatory framework for digital assets and are skeptical of the creation of a U.S. CBDC.
