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The payments landscape for community banks is changing rapidly as traditional payments converge with new instant payment systems and emerging cryptocurrencies. It is critical for Community Banks to maintain awareness of developments in the payments space to assess new opportunities, mitigate risks, and ensure that their payment strategy aligns with overall business plans.
Sep. 15, 2023
ICBA reiterated to Congress its opposition to the creation of a U.S. central bank digital currency.
CBDC Opposition: In a written statement for a House Financial Services subcommittee hearing, ICBA said:
Congress should oppose the formation of a U.S. CBDC because it would disintermediate community bank deposits and risk a consumer privacy backlash.
The policy goals of a U.S. CBDC would best be addressed through alternatives, such as FedNow.
A wholesale CBDC—a potential form of digital currency limited to financial institutions—is similarly unnecessary given the increasing adoption of instant payment solutions.
ICBA-Supported Bills: In its statement, ICBA urged lawmakers to support pending legislation to:
Bar the Federal Reserve and Treasury Department from issuing a CBDC without congressional authorization.
Prohibit Federal Reserve Banks from offering products or services directly to individuals, maintaining individual accounts, or issuing a CBDC to individuals.
Ongoing Advocacy: ICBA has repeatedly expressed opposition to the creation of a U.S. CBDC, including in comment letters to the Fed and Treasury and in an American Banker op-ed earlier this year.