Fed governor criticises idea of launching a digital dollar

The launch of a central bank digital currency (CBDC) will not strengthen the position of the US dollar on the international stage. About this заявил член Совета управляющих ФРС Christopher Waller during a speech at Harvard University.

“Proponents of issuing CBDC, as a rule, promote it as a tool capable of reducing transaction costs, speeding settlements, and delivering a better user experience. I am highly sceptical that CBDC itself can sufficiently mitigate the traditional problems to prevent such things as fraud, theft, money laundering or the financing of terrorism,” he said.

According to Waller, the digital currency will automate some processes, but it is not a ‘unique’ solution. The official explained that most new tools aimed at improving cross-border settlement quality are part of existing systems.

He stressed that the dollar’s position as the world’s reserve currency is driven more by political and financial factors than by technological ones.

“The factors underpinning the dollar’s supremacy are not technological, but include ample supply, a liquid market for Treasuries and other obligations, and the long-standing stability of the U.S. economy and political system. No other country can fully match the United States on these metrics; launching a CBDC will not alter the situation,” the official said.

Waller said that a CBDC would be easier to control, and as a result many companies would refrain from using the instrument. He also added that the digital currency would not confer any ‘material advantages’ on foreign players.

Earlier the official had already criticised distributed ledger technology and its products. In March 2022 he called blockchain overrated and noted that some CBDC research resembles “advertising clips”.

Earlier, in September, Fed Chair Jerome Powell said there was absence of a decision on launching a digital dollar.

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