While countries in the rest of the world progress on their central bank digital currency (CBDC) programs, the United States continues to drag its feet.
U.S. Federal Reserve Governor Christopher Waller has stated that he is “highly skeptical” that the country needs to develop its own central bank digital currency (CBDC).
In remarks prepared for delivery to the American Enterprise Institute on Aug 5, the central bank board governor said:
“While CBDCs continue to generate enormous interest in the United States and other countries, I remain skeptical that a Federal Reserve CBDC would solve any major problem confronting the U.S. payment system,”
According to Bloomberg, Waller added that he saw no reason why the USD would not continue to dominate the international payment system, even if other nations started using digital currencies for cross-border payments.
Conflicting opinions on a digital dollar
The remarks show that the U.S. is still way behind other nations and some of those at the top still don’t see the need to digitize its currency. There does appear to be a lot of conflicting opinions on the board of the Federal Reserve.
In late May, Federal Reserve Governor Lael Brainard offered a range of reasons for urgency around issuing and developing a digital dollar. Speaking at the Aspen Institute Economic Strategy Group in late July, she said “if you have the other major jurisdictions in the world with a digital currency, a CBDC offering, and the U.S. doesn’t have one, I can’t wrap my head around that.”
In May, Federal Reserve Chairman Jerome Powell said that the Board of the Fed will issue a paper focusing on the risks and benefits associated with a CBDC. In late June, vice chair of supervision, Randal Quarles, said that a digital currency “could pose significant and concrete risks” while the benefits are unclear.
As reported by BeInCrypto on Aug 3, a digital dollar could actually help the U.S. economy drag itself out of the quagmire of national debt and trade deficit it has created.
Uncle Sam getting left behind
Waller appears to be on a mission to dismantle many of the arguments in favor of digital dollar development. He hinted that the current payment system was adequate and “facilitating speedier payments is not a compelling reason to create a CBDC.” He estimated that only a fraction of the unbanked, which adds up to around 1% of U.S. households, would be interested in a CBDC.
Regarding China’s efforts, he added:
“I see no reason to expect that the world will flock to a Chinese CBDC or any other. Why would non-Chinese firms suddenly desire to have all their financial transactions monitored by the Chinese government?”
China is forging ahead regardless with several trials already launched, so the digital yuan is far more likely to see the light of day than any digital greenback.