Electronic Transactions Association Proposes 7 Guiding Principles for a Digital Dollar – Finance Bitcoin News

The Electronic Transactions Association (ETA) has put forward a set of guiding principles to be considered in the creation of a U.S. central bank digital currency (CBDC), also referred to as digital dollar. The organization, which unites hundreds of companies in the payments industry, confirms its commitment to ensuring access to financial services for all Americans.

Payments Industry Association ETA Issues Guiding Principles for CBDC

ETA is the world’s leading trade association representing the interests of companies involved in providing products and services pertaining to electronic transaction processing. Among its more than 500 members are Visa, Mastercard, Paypal, Bank of America, Google, Apple, and many other established players in the sector.

In a document put out by its official publication, Transaction Trends, ETA lists “7 Guiding Principles,” against which any CBDC should be measured. The trade association is convinced that the U.S. government should carefully consider these principles to ensure that a CBDC proposal serves the needs of consumers and furthers financial inclusion. The release comes at a time when the Federal Reserve is working on a digital version of the dollar. Some prototypes are set to be unveiled in July, as news.Bitcoin.com reported recently.

ETA insists that consumers must be guaranteed continued “access to a robust and innovative array of secure banking and payment options.” It also warns that although the adoption of a CBDC is associated with certain benefits, Washington should also take into consideration “the inherent costs and risks.” These could be different depending on how the CBDC is designed.

“Innovation” is the first principle listed by the association. The introduction of a CBDC should catalyze innovation in multiple areas such as strengthening cybersecurity and consumer protection as well as expanding access to financial services. Regulators have to also find “the right tool for the job” by comparing CBDC designs with existing payments systems, taking into account their ongoing improvements.

Private Sector Participation Deemed Essential for the Digital Dollar

The trade association believes that competition in the payments industry is important for maintaining the efficiency of national and international payment flows. “Private sector participation” in the design and distribution of a CBDC is essential. And as any central bank digital currency would be introduced into an established ecosystem, ensuring “interoperability” with other payments systems is also necessary.

“Open acceptance” is another important principle as according to ETA, consumers will be more likely to adopt a CBDC that can be used on existing networks and supported by known payment methods. A merchant accepting cards should be able to take CBDC as well.

“Consumer protection” is a key area too, with ETA pointing out that the framework for the digital currency should ensure the privacy and security of every in-person and online transaction. The organization also advocates for the adoption of “regulation tailored to the risk profile of the participant,” which takes into account the activities of the various entities and the risks associated with them.

ETA CEO Jodie Kelley vowed that the organization and its members will work with the U.S. government to ensure that all American citizens continue to have access to critical financial services. “These ‘7 Guiding Principles for CBDC’ are designed to evaluate whether the benefits of any proposal outweigh the negatives and significantly enhance the innovative, ubiquitous, and secure payments ecosystem that currently makes access to financial services a reality,” Kelley noted, quoted in a press release.

What’s your opinion about the guiding principles for CBDC released by the Electronic Transactions Association? Share your thoughts on the subject in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons