Federal Reserve governor says private stablecoins are likely better than CBDCs
In a speech before the American Enterprise Institute on Aug. 5, Federal Reserve governor Christopher Waller expressed doubt about the touted benefits of a central bank digital currency (CBDC).
“I remain skeptical that a Federal Reserve CBDC would solve any major problem confronting the U.S. payment system,” said Waller. He cited a fairly free market principle as his rationale:
“In general, the government should compete with the private sector only to address market failures. This bedrock principle has stood America in good stead since its founding, and I don’t think that CBDCs are the case for making an exception.”
Instead of a Fed-issued digital dollar, Waller seemed to cautiously promote advancements of the private sector, specifically stablecoins. Waller noted that private stablecoins may well provide the competition to the banking sector’s mark-up on digital payment that advocates of a CBDC advertise.
Stablecoins have, however, proven controversial. “There are many legal, regulatory, and policy issues that need to be resolved before stablecoins can safely proliferate,” said Waller, citing a pending report on the subject from the President’s Working Group.
Waller’s comments join a growing chorus, particularly from the right-wing, promoting private-sector stablecoins over a CBDC.
In a recent hearing with Fed Chair Powell, Senator Pat Toomey — like Waller, a Republican — came to a similar conclusion. “If you have stablecoins and cryptocurrencies in use then maybe there’s no need for CBDC,” said Toomey.
© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Kollen Post
