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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.
March 02, 2023
A Treasury-led interagency working group charged with advancing work on a possible U.S. central bank digital currency has narrowed its objectives into three key policy areas, Treasury Under Secretary for Domestic Finance Nellie Liang said.
Key Objectives: Speaking in Washington, Liang said the CBDC Working Group’s objectives focus on:
More: Liang noted that the FedNow Service scheduled to launch this summer is an alternative option for upgrading the legacy capabilities of central bank money. She also reiterated that the Federal Reserve has emphasized that it would only issue a U.S. CBDC with the support of the executive branch and Congress.
ICBA Position: ICBA opposes the creation of a U.S. CBDC, arguing that it would disintermediate community banks and pose privacy risks without improving on superior payment alternatives, such as FedNow. ICBA in September 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.
Next: Friday is the deadline to respond to a White House Office of Science and Technology Policy request for information on a National Digital Assets Research and Development Agenda. ICBA will submit a response by the deadline.