Global DCA Response – Response to “Money and Payments: The U.S. Dollar in the Age of Digital Transformation”Renata Szkoda
Global DCA writes to highlight our significant views and considerations about certain key aspects of the CBDC proposal given its possible influence on the digital asset industry, financial markets, and the general public.
The GDCA welcomes the new exploration and public discussion of a CBDC by the Board. The GDCA strongly supports the Board’s continued study and exploration of CBDCs. We think that a successful implementation of a U.S. CBDC could have a huge consequence on the various aspects of our society, from strengthening the Fed’s ability to implement policy, to increasing access to financial services, to speeding and modernizing financial transactions. In the long term, a U.S. CBDC, or appropriate support of private digital currency development, is essential to maintaining U.S. dollar dominance and to preserving America’s role on the global stage.
With CBDCs, as with much else in life, the devil is in the details. Well designed, a CBDC could have an overwhelmingly positive influence on the U.S. financial system. Poorly designed, a CBDC could have significant negative impacts, posing a serious threat to privacy and enabling new modes of government surveillance. Ultimately, the outcome rests on the architecture of a CBDC and its ecosystem. We therefore believe that it is important to continue to explore various types of CBDC design, examine existing launched/pilot cases and their implications for the U.S. (the fundamental concepts, design, and technological considerations such the usage of blockchain), and how private digital currency might coexist interoperable with a CBDC. We also believe that a continued open discussion on CBDCs with stakeholders will be crucial to building a better system. The GDCA believes that any consideration of a CBDC should be user-driven and centered around improving the financial ecosystem.
In summary, our main perspectives are:
- The Federal Reserve should continue to study and explore the architecture and issues concerning CBDC, having an open discussion with various actors and ultimately implementing one only after a broad consensus has been reached and Congressional authorization has been given.
- There should be an ecosystem where any CBDC and privately-issued digital currencies co-exist to allow end-users to make a choice between payment methods for each transaction.
- A well designed CBDC system will provide new opportunities and promote participation from the private sector. This collaboration will drive innovation and increase resilience to the financial system as a whole.
- Any U.S. CBDC should be designed to maximize interoperability and integration with systems not only in the U.S. but around the world.
From this perspective, the GDCA has responded to the call for public comments. Please CLICK below to read the full response!