As U.S. policymakers consider how to regulate digital asset technologies, the American Bankers Association called on them to “remain vigilant and deliberate” to “ensure that our regulatory environment supports innovation rather than overregulating or replacing private sector innovators” in a comment letter to the Commerce Department today.
Specifically, ABA cautioned that guidance including the Securities and Exchange Commission’s Staff Accounting Bulletin 121—which requires an SEC registrant to record an obligation to safeguard cryptoassets it holds for platform users, effectively bringing the value of cryptoassets a bank holds in custody on behalf of its clients on the balance sheet—could hinder banks’ ability to compete in the digital asset market.
ABA also reiterated its longstanding view that banks, working with regulators and private-sector partners, are already working to build and enhance digital payments channels, emphasizing that “the dollar is already digital,” and that the creation of a central bank digital currency is therefore unnecessary.
“Digital assets represent a rapidly developing marketplace, and banks are actively evaluating ways to safely and responsibly compete,” ABA noted. “We believe that ensuring regulatory clarity and a level playing field is critical to enhancing innovation and competitiveness in the space. Further, we believe that a U.S. CBDC presents risks that are not overcome by the potential benefits, and moreover those benefits are better achieved in other ways.”