Federal Reserve Gov. Christopher Waller Friday methodically explained his opposition to the development of a U.S. central bank digital currency, taking aim at some arguments that his fellow board members had put forward in recent weeks.
Speaking at a symposium sponsored by the Harvard National Security Journal in Cambridge, Massachusetts, on Friday, Waller
"Advocates for creating a U.S. CBDC often assert how it is important to the long-term status of the dollar, particularly if other major jurisdictions adopt a CBDC. I disagree," Waller said. "The underlying reasons for why the dollar is the dominant currency have little to do with technology, and I believe the introduction of a CBDC would not affect those underlying reasons."
Waller, who was appointed to the Fed board by former President Donald Trump, went on to hypothesize what might happen to the dollar's role as the global reserve currency of choice if other countries adopted a CBDC and the U.S. did not, if the U.S. did develop a competing CBDC, or if nongovernmental intermediaries like banks issued stablecoins that came to dominate the currency markets. In all of those scenarios, he said, the factors that make the dollar attractive for holding value and conducting international business would remain largely unchanged, and the frictions that a CBDC might lessen could be achieved through other means.
"The dollar serves as a safe, stable, and dependable form of money around the world. It serves as a reliable common denominator for global trade and a dependable settlement instrument for cross-border payments," Waller said. "We should instead focus and debate the salient CBDC-related topics, like its effects on financial stability, payment system improvements and financial inclusion."
Waller's comments come in opposition to remarks from Fed Vice Chair Lael Brainard in July, who said a CBDC would be a "
But Waller is far from alone as a skeptic of CBDCs. Minneapolis Fed President Neel Kashkari
Waller reiterated that "no decisions have been made" at the Fed regarding CBDCs, and said his remarks were intended to provide a free and open dialogue on their utility.
"I am very happy to engage in vigorous debate regarding my view," Waller said. "I remain open to the arguments advanced by others in this space."