Digital Dollar: Fed Governor Finally Open to Issuance?

Given the democratization of the crypto industry, central banks want to retaliate by also offering fiat currencies in digital version. Last March, US President Joe Biden unveiled his plan to issue the digital dollar, an idea that never pleased the US Federal Reserve. Moreover, its governor, Christopher Waller, has just reaffirmed the position of the institution he heads. He reportedly once again pushed back against the idea that the US central bank should design the digital dollar. The days pass, but the logic remains the same, the FED does not intend to give a centimeter to the digital dollar.

Christopher Waller doubts the US dollar

Christopher waller casts doubts on digital dollar issuance

It is the current fashion, to face the unfair competition of cryptocurrencies, the central banks think about digital currencies like the US dollar. In addition to Nigeria, the Philippines, Vietnam, and even China, more and more of them are adopting the digital version of their fiat currencies. Inevitably, this way of doing things pleases the United States and the current president has never hidden his desire to issue the digital dollar with the help of the Central Bank Digital Currency (CBDC). He had already indicated it at the beginning of the year, but this proposal had found fierce opponents. One of the most virulent is none other than the governor of the American Federal Reserve, Christopher Waller.

While the 6-month reflection period granted to the CBDC and the FED on the issue has just ended, positions have not really changed. Invited to the Money 20/20 conference in Las Vegas, he stated that: “It’s just a current account at the Fed (…) I’m not a big fan of it, but I’m open to someone convincing me that it’s something that really has value. » Waller’s position comes at a crucial time when U.S. lawmakers and the government want to speed up the adoption process.

Especially since geostrategic competitors, such as China and the Russia, seem to have a head start on the matter. It is important that on the sidelines of the adoption of the digital dollar, the Fed would have published a document in January which it described as the first step in the great reflection that the subject imposes.

Conclusion

The FED’s stance on adopting the digital dollar is important, because supporting the digital dollar would be a definite plus for the United States. Indeed, this will allow the dollar to have a certain dominance over the other currencies and Washington will be able to keep the monopoly on its economic challenger, China. But to get there, it will be necessary to convince Wall Street lenders that such a project will not be without consequences for the current banking system.

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