On May 20, 2022, the Committee submitted a comment letter to the Federal Reserve Board (the “Fed”) concerning its recent consultation paper, “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” which invites public discussion of the creation of a central bank digital currency (a “CBDC”).

The Committee finds that the principal benefits advanced in favor of a CBDC are either uncertain or achievable by other means. Conversely, the potential for a CBDC to diminish the market’s role in intermediating funds through the private banking sector (and thus increase the central bank’s role) has significant downsides. It is therefore our position that, as of the present time, the costs associated with the introduction of a CBDC outweigh its uncertain benefits. While we favor further research and discussion of a CBDC, we are skeptical that such consideration will change this essential calculus.

The full letter is available here.