“It’s just a checking account at the Fed“, the governor said. Federal Reserve Chairman Jerome Powell recently said the central bank has not decided whether to issue a digital dollar.
Fed governor skeptical of CBDCs
Federal Reserve Governor Christopher Waller shared his views on central bank digital currencies (CBDCs) Tuesday at the Money 20/20 in Las Vegas. Commenting on the Federal Reserve’s issuance of a digital dollar, he was quoted by Bloomberg as saying:
It’s just a checking account at the Fed. I’m not a big fan of it, but I’m open to the idea that someone can convince me that it’s something that’s actually valuable.
Some people have argued that a Fed-backed digital currency would help ensure the dominance of the U.S. dollar, noting that many countries, including China, are already working to launch their own CBDCs.
The People’s Bank of China (PBOC) has been actively testing its CBDC. In September, China’s central bank revealed its intention to expand the digital yuan’s test areas. This month, the PBOC said transactions with its central bank digital currency had exceeded 100 billion yuan ($13.9 billion) as of August 31.
Christopher Waller opined:
It is not clear why China, by giving its citizens a checking account at the People’s Bank of China, will undermine the reserve role of the dollar in the world payments system.
The Federal Reserve outlined its work on the digital dollar in a press release in January entitled ” Money and Payments: The U.S. Dollar in the Age of Digital Transformation“, calling it “first step in a public discussion between the Federal Reserve and stakeholders.“
However, the U.S. central bank has not yet decided whether it will issue a digital dollar. Fed Chairman Jerome Powell said in September, “We have not decided to proceed and we do not see ourselves making that decision for some time.“He added:”We consider this to be at least a two-year process in which we do work and build public confidence in our analysis and final conclusion.“Jerome Powell also noted that the decision on whether to issue a digital dollar would have to be approved by both the executive branch and Congress.