Federal Reserve Governor Christopher Waller stated that he doesn’t like the Fed issuing central bank digital currencies (CBDC) and isn’t a fan. “It’s just a checking account at the Fed,” said the governor. Jerome Powell, Federal Reserve Chairman, stated recently that no decision has been made by the central bank whether or not to issue a virtual dollar.
Fed Governor is skeptical about CBDCs
Christopher Waller (Federal Reserve Governor) shared his opinion on Tuesday, during Money 20/20 in Las Vegas. Bloomberg quotes him saying the following:
It’s just a checking account at the Fed. I’m not a big fan of it, but I’m open to having someone convince me that this is something that’s really valuable.
Some people have argued that a Fed-backed digital currency would help ensure the U.S. dollar’s dominance, noting that many countries, including China, are already working on launching their own CBDCs.
The People’s Bank of China (PBOC) has been actively trialing its CBDC. In September, China’s central bank declared its intentions to extend the test areas for digital yuan. According to the PBOC, transactions made with digital currencies of its central banks exceeded 100 billion yuan (or $13.9 billion) by August 31.
It’s not clear why China giving their citizens a checking account at the People’s Bank of China, why that’s going to undermine the reserve role of the dollar in the global payments system.
The Federal Reserve outlined its digital dollar work in a January report titled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” calling it “the first step in a public discussion between the Federal Reserve and stakeholders.”
The U.S. central banking has yet to decide whether it will issue a digital currency. Fed Chair Jerome Powell said in September: “We have not decided to proceed and we don’t see ourselves making that decision for some time.” He added: “We see this as a process of at least a couple of years where we are doing work and building public confidence in our analysis and in our ultimate conclusion.” Powell also noted that the decision of whether to issue a digital dollar would need approval from both the executive branch and Congress.
Are you a believer that the Federal Reserve should create a digital currency? Please leave your thoughts in the comment section.
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