NAFCU: the costs of developing CBDC can potentially outweigh the benefits

In an open letter to the US Commerce Department, Andrew Morris, the senior counsel for research and policy at the National Association of Federally-Insured Credit Unions (NAFCU), warned against the development of CBDC.

The US-based lobbying group shared their concerns about implementing the digital dollar. In a letter that comes as a response to the Department’s request for comment on digital assets, Morris claimed that the costs of developing CBDC outweigh the benefits of its adoption, adding that there are “superior alternatives” for accomplishing the same objectives.

Although access to the original letter is restricted, the press release states that the supposed “superior alternatives” are some unnamed “private and public sector payments initiatives.” And just as one would expect from the union representing the interests of credit issuers, the best practice to reach underserved people is to support credit union engagement with these communities.

“With respect to fostering U.S. competitiveness in the broader arena of digital asset related activities, NAFCU encourages the ITA and Commerce to support a level playing field, the consistent application of consumer financial protection law, and the encouragement of responsible credit union innovation,” concluded Morris.

The very same letter was sent to the Federal Reserve earlier in May. However, it’s highly unlikely to change Fed’s optimistic stance on the digital dollar: Chair Powell believes that CBDC can safeguard the dollar’s global dominance.

“One question around CBDCs is do we want a private stablecoin to wind up being the digital dollar? I think the answer is no,” he said. “If we're going to have a digital dollar, it should be government-guaranteed money, not private money.”