Home
News
In a speech made public on October 14, Christopher Waller, a member of the U.S. Federal Reserve Board of Governors, claimed that a digital currency issued by the U.S. central bank (CBDC) would not improve the features of the U.S. fiat dollar that overseas businesses value most. A national security perspective was applied to the issue by CBDC sceptic Waller during a seminar hosted at Harvard University. A stablecoin backed by the dollar was seen more favourably by Waller.
Economic theory, CBDCs, and national security all intersect in the context of the U.S. dollar’s international position, according to Waller. The United States and other nations that use the dollar as a unit of exchange or in local economies benefit from the dollar’s undisputed primacy in the world.
According to Waller, the reasons for this priority are not related to technology developments, therefore the establishment of a U.S. CBDC would have no effect on them.Despite the possibility that foreign CBDCs could profit from the dollar’s decline as a medium of exchange, he questioned whether “the purported shifting payments landscape as a result of the growth of digital assets, particularly CBDCs” poses a threat to the status of the U.S. dollar in the global settlement and value-storage markets.
On the domestic front, says Waller:
“It is unlikely that a U.S. CBDC will significantly alter the depth or liquidity of U.S. financial markets. It is unlikely to have an impact on how open the American economy is, how people feel about American institutions, or how strongly America supports the rule of law.
In Waller’s opinion, stablecoins play a different role. He simply said, “I don’t believe that to be the case,” in response to claims that stablecoins might impair the efficiency of economic policy. Waller came to the conclusion that because “almost all large stablecoins” are denominated in dollars, “U.S. monetary policy should affect the decision to hold stablecoins similar to the decision to hold [U.S.] currency.” This would probably increase American economic influence.
Waller’s argument contained significant amounts of both research and opinion. For instance, he said, “The variables influencing the dollar’s status as a reserve currency are extensively researched and well proved.” Other parts of his reasoning were original to him. “I am doubtful whether even a big issue of a stablecoin could have anything more than a minor influence” on the function of the U.S. dollar, he added. “I am highly skeptical that a CBDC on its own could sufficiently decrease the typical payment frictions.”
“I remain open to the ideas given by others in this domain,” Waller added. He has already expressed his opinions on stablecoins and CBDCs, as well as made additional arguments against a U.S. CBDC.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
