Central Bank Digital Currency (CBDC)


  • ICBA opposes the creation of a Central Bank Digital Currency (CBDC) because the associated risks would outweigh its potential benefits. The policy goals that have been articulated in support of a CBDC would best be addressed through alternatives that are readily available in the market today.
  • As the Federal Reserve and Federal agencies evaluate whether to create a U.S. CBDC, they must consider the risks, policy trade-offs, and challenges with the practicalities of introducing a CBDC in the United States, alongside the goals, use cases, technological considerations, and benefits.
  • Before instituting a CBDC, Congress would need to exercise its authority to evaluate a solid legal framework.
  • ICBA adamantly opposes the direct provisioning of retail accounts at the Federal Reserve.
  • The issuance of a CBDC would unfairly position the Federal Reserve as a direct competitor for bank deposits, obstructing banks’ ability to provide vital lending services to customers.
  • Essential to the analysis of a U.S. central bank digital currency, ICBA urges the Federal Reserve to lead collaboration and broad engagement with a diverse array of stakeholders, including community banks.


The White House, the Federal Reserve, and Treasury are actively exploring the creation of a Central Bank Digital Currency (CBDC), defined as “a digital liability of a central bank that is widely available to the general public.” Policymakers are studying the risks, costs, and benefits a CBDC as well as its implications for economic growth and stability, financial inclusion, and illicit financial activity.

The economics of a CBDC – both direct costs to build and deploy as well as the economic impact– are not well understood. Moreover, policy goals of a CBDC can be achieved by other means. With the introduction of FedNow instant payment services and increased Same Day ACH adoption, Americans are enjoying faster transactions clearance and can expect further innovations to be built upon these rails. FedNow must be given a chance to succeed in achieving payments modernization.

A CBDC could destabilize existing banking and payments systems that are the backbone of our economy and markets. The introduction of CBDC could erode the Federal Reserve’s ability to conduct monetary policy and interest rate control by altering the supply of reserves in the banking system and forcing the Fed to balloon its balance sheet. Depositors may prefer CBDC over bank deposits in a crisis even if the CBDC has a less attractive rate of return, introducing the potential for bank runs. The Federal Reserve must preserve the vital role of community banks as economic engines of the U.S. economy.