Christopher Waller, a member of the board of governors of the U.S. Federal Reserve System, has said he opposes the introduction of a U.S. digital dollar.
Governor Waller said in a speech before a symposium presented by the Harvard National Security Journal, Cambridge, Massachusetts that he remains skeptical of whether there is a compelling need for the Fed to create a U.S. central bank digital currency (CBDC).
The governor gave several reasons for his misgivings. According to him, the underlying reasons that make the dollar the dominant currency have little to do with technology. The dollar is dominant because of the U.S.'s robust funding markets, foreign exchange transactions and invoicing.
The dollar is also the world's predominant reserve currency. These underlying reasons are not going to be affected by the introduction of a CBDC. He added that these reasons also make it unlikely that the dollar will be displaced by another sovereign currency simply because it is issued as a digital asset. He 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.
Could the Fed instead promote stablecoins?
Waller's speech is coming after the White House released a report on the technical possibilities of a digital dollar. Despite releasing its discussion paper on a CBDC in January, the Fed is yet to reach a final decision.
Meanwhile, Waller advocates for the adoption of dollar-pegged stablecoins. He maintains that the availability of dollar-pegged stablecoins for international payments could increase the primacy of the dollar abroad.