Fed Governor Waller says US CBDC will not reinforce what the world likes about US fiat currency

The U.S. Central Bank’s digital currency (CBDC) will not improve the quality of the dollar, the fiat currency most valued by foreign companies, U.S. Federal Reserve Governor Christopher Waller said October 14. said in a speech released today. Through the lens of national security at a symposium held at Harvard University. Waller took a more favorable view of dollar-backed stablecoins.

The US dollar’s role in the world is an area where economics, CBDC, and national security reconcile, Waller said. The undisputed dominance of the US dollar in the world benefits the United States and other countries where the dollar plays a role in the economy or as a reserve currency.

Just in: New Speech Fed Governor Christopher Waller – U.S. Dollar and Central Bank Digital Currencies#CBDC #community bank #payment #stablecoins #Central Bank Via https://t.co/MgpbBUw3j7 @Federal Reserve pic.twitter.com/wao6tEwL2n

—Brian Laverdure, AAP (@brian_laverdure) October 14, 2022

Since this advantage is not due to technological factors, Waller argued, the introduction of CBDCs in the United States would not affect the reasons for that advantage. He questioned that “the alleged change in payment landscape as a result of the growth of digital assets, especially his CBDC” is a threat to the U.S. dollar’s place in the world of making payments and storing value. expressed. medium of trade.

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“A U.S. CBDC is unlikely to dramatically change the liquidity or depth of U.S. capital markets. It is unlikely to deepen US commitments to

In Waller’s view, this contrasts with the role of stablecoins. He dismissed his suggestion that stablecoins could threaten the effectiveness of economic policy with the simple statement, “I don’t think so.” Noting that “almost all major stablecoins” are denominated in dollars, Waller concluded: [U.S.] currency. “Perhaps this will expand the economic influence of the United States.

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Waller included a fair amount of both scholarship and opinion in his arguments. For example, he says, “The factors driving the dollar’s role as a reserve currency are well-researched and well-documented.” Other elements of his argument were of his own making. “I am very skeptical that a CBDC alone will be enough to mitigate traditional settlement frictions.” I don’t know,” he said. He said.

Waller also said, “I remain open to the arguments that others make in this area.” He has previously expressed his own position on CBDCs and stablecoins and has made other arguments against his CBDC in the US.