- Fed governor Christopher Waller emphasized his opposition to US CBDC (central bank digital currency) during Harvard University remarks (yesterday).
- Waller added that facets backing the dollar’s primacy aren’t technological.
Meanwhile, a Federal Reserve governor remains against a digital dollar. Fed Governor Christopher Waller revealed ‘cold’ remarks on the possibilities of the Fed introducing a digital currency during Friday’s speech, expanding and reiterating his stance against the idea.
Waller stated that factors backing the dollar’s primacy aren’t technological but incorporate the adequate supply & liquid market for the United States Treasury securities & other debt plus the stability of the US political and economic system.
He added that no other nation could match the US in those sectors, and a CBDC wouldn’t change that. Waller revealed that he’s skeptical about debates by CBDC supporters that a digital currency would address money laundering, fraud, theft, or enhance transactions that the current technologies.
He confirmed multiple efforts on the international front aimed at improving cross-border transactions. Moreover, the enhancement doesn’t associate with CBDCs but with improved the existing transaction models.
Debates about a United States CBDC increased after China began experimenting with its digital yuan. Meanwhile, the Federal governor doubts a foreign CBDC can displace the USD’s international reserve currency status. Remember, this argument emerged to support a digital dollar.
Fed Vice Lael Brainard and Chair Jerome Powel have also started erasing the hopes of a possible US CBDC arriving soon. Waller believes the effects of firms using a foreign CBDC will only be minor as they demand massive business & individuals are relatively indifferent between the USD and the CBDC foreign currency.
Waller believes private stablecoins strengthen the dollar, instead of weakening it, with many pegged to the globe’s top fiat currency. The Federal governor added that they could heighten rather than decrease the dollar’s primacy abroad, as stablecoins demand amplified demand for dollar-controlled reserve assets that stablecoin issuer holds.
Waller added that the new transaction technology requires a robust regulatory and supervisory framework, echoing warnings from the American Financial Stability Oversight Council.
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