Federal Reserve Governor Christopher Waller said he has yet to be convinced there is a market failure that a central bank digital currency would resolve.

CBDC Impact: Speaking in Washington, Waller said a CBDC would subvert the Fed’s traditional role of making sure the payments system operates efficiently while financial institutions engage consumers. “What then are the reasons that support why we should change our role to sitting out front and engaging directly with the consumers? I haven't heard a good answer to that,” he said.

FedNow Role: Waller also said the FedNow Service is helping to speed up payments, though banks have a role in adopting FedNow to settle payments instantly. “They will have to adapt their systems to be able to connect to FedNow, and how soon they do that will depend in part on how much their customers demand instant payments,” Waller said.

ICBA View on CBDC: ICBA opposes the creation of a U.S. CBDC and recently told Congress a wholesale CBDC is similarly unnecessary given the increasing adoption of instant payment solutions. ICBA recently commended the House Financial Services Committee for passing legislation to restrict the Federal Reserve from issuing a CBDC.

FedNow Resources: Recent ICBA blog posts recap the decade of work that led to the FedNow launch and experiences on how the launch is going. More information is available via a recent Independent Banker magazine article on how FedNow differs from other instant payments tools, a separate Independent Banker guide for community banks, and ICBA Bancard’s instant payments resource center.