Clearing House Opposes CBDCs in Response to US Treasury Call for Comments

The Clearing House, an association of banking and payment companies controlled by the largest commercial banks in the United States has responded to The Treasury Department’s request for comment on the national security risk posed by illicit digital assets.

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In a letter dated November 3 but made public on November 11, The Clearing House mentioned ways the concerns raised by The US Treasury Department could be mitigated.

According to the company, the authorities should maintain an equivalent regulatory framework and the same standard for digital asset service providers and financial institutions performing depository functions.

In addition, The Clearing House also asked that banks have equal rights as non-banks to partake in digital asset-related activities.

Furthermore, the company believes the possible risks associated with the issuance of a US CBDC outweigh its perceived benefits. As such, if the United States decides to adopt a CBDC, it should apply the necessary preventive technicalities required to guard against criminal use of the CBDC.

However, while addressing an audience at an event hosted by the Bank of France, Jeremy Powell, the Federal Reserve Chairman has said the CBDC would not be anonymous although the Fed is still undecided on whether or not to move forward with a CBDC.

According to the Chairman, a successful CBDC must possess identity verification, privacy protection, interoperability, and mediation. In order to achieve this, a balance must be struck between identity verification and privacy protection, which is already the practice in existing conventional banking systems.

US Treasury Requests Stakeholders’ Input on the Crypto Framework

The Treasury Department had earlier in September called for inputs from stakeholders in response to President Joe Biden’s Executive order 14067.

The public had until November 3 to submit their take on regulations that may affect the illicit use of crypto. The U.S Treasury also asked for suggestions on mitigating ransomware attacks, risks posed by crypto mixers, and possible solutions for combating money laundering and financing terrorism.

Before its call for inputs, the US Treasury, in compliance with the Executive Order delivered a comprehensive framework target for the digital currency ecosystem. The framework details how the United States will work with other global leaders to protect final consumers.

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