Monday, December 5, 2022
HomeLaw & PoliticsFed Governor unveils his stand on idea of issuance US digital dollar

Fed Governor unveils his stand on idea of issuance US digital dollar

In a speech on October 14, Fed Governor Christopher Waller raised his objection to the idea of a Fed-issued U.S. digital dollar. Governor Christopher Waller of the Federal Reserve Board is completely against the digital dollar.

Waller stated at Harvard University, “the factors supporting the supremacy of the dollar are not technological, but include the vast supply and liquid market for U.S. Treasury securities and other debt as well as the long-standing stability of the U.S. economy and political system. No other nation is truly comparable with the United States on those aspects and a CBDC would not change that.”

Additionally, the Fed Governor said that he is doubtful of the claims made by CBDC supporters that a digital dollar would handle theft, fraud, and money laundering or enhance payments more than current technology.

Waller stated that, “Sincere efforts are being made at the global level to enhance cross-border payments in numerous ways, with vast majority of these enhancements come from advancements to current payment protocol rather than from CBDCs.”

Talks about a U.S. CBDC really picked up steam, when China began testing a digital yuan. Apart from providing negative traits of digital dollar Fed governor comments in favour of a digital dollar by saying, a foreign CBDC would displace the U.S. dollar as the world’s reserve currency.

Fed Chairman Jerome Powell and Vice Chairman Lael Brainard respectively are delaying the chances of a U.S. CBDC occurring anytime soon.

Waller stated that even if a foreign CBDC is successful, its effects on businesses “would probably only be marginal because they rely on a big enough proportion of people and organisation being almost impartial between the dollar and the foreign currency in CBDC form.”

Waller believes that because so many privately-issued stablecoins are linked to the most widely used fiat currency in the world, they will support the dollar rather than harming it.

The Fed governor claimed that, “ as stablecoin demand raises demand for dollar-denominated reserve funds owned by the stablecoin issuer, they may boost rather than decrease the dollar’s supremacy abroad.”

Waller expressed similar cautions from the Financial Stability Board, the Financial Stability Oversight Council, an international advisory consortium for central bankers and other senior officials, the American super committee of financial regulators, by saying, “the new payments innovation must also be “risk-managed and subject to a strong regulatory and supervisory structure.”

The Stablecoin bill is still being negotiated in Congress, but Rep. Patrick McHenry, R-N.C., who is the chief Republican negotiator, told that the Biden government is delaying progress on the legislation.

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