GOP lawmakers skeptical on merits of CBDC in letter to Fed

A group of Republican lawmakers led by House Financial Services Committee Ranking Member Patrick McHenry (R-N.C.) this week urged the Federal Reserve to carefully examine whether the benefits of creating a central bank digital currency would outweigh the risks of doing so.

As the Fed considers its course of action on CBDC, the lawmakers urged the agency to focus on: identifying inefficiencies in the U.S. payments system and whether a CBDC would solve them; ensuring that the private sector leads the way on innovation; considering the effects of a CBDC on monetary policy implementation and the role of the Fed; and ensuring privacy and security for consumers.

As policy conversations continue regarding the creation of a U.S. CBDC, ABA has raised concerns that the creation of such a currency could compete with bank deposits and limit banks’ ability to power economic growth.