U.S. Federal Reserve Governor Christopher Waller has again undermined the need for a central bank digital currency.
Governor Waller said on Friday he is not convinced of the need for a central bank digital currency, particularly for retail customers who already have access to fast payment systems, Reuters reported.
Speaking at a virtual event on central banking and digital currencies, Waller questioned, “Why do we really need it?”.
“I haven’t been convinced of that yet. It’s not saying that I can’t be, but I haven’t seen that on a retail CBDC,” said Waller.
Waller has been a stron critic of CBDC. Last year he made a long speech on the case for a CBDC and termed it “A Solution in Search of a Problem”.
He said, “After exploring many possible problems that a CBDC could solve, I am left with the conclusion that a CBDC remains a solution in search of a problem. That leaves us only with more philosophical reasons to adopt a CBDC.”
Waller seems to be making right assessment as far as the application of a CBDC concerned. A CBDC will not be more than a digital form of fiat money running on the blockchain. Governments across the globe are speeding up their CBDC efforts to counter Bitcoin and other cryptocurrencies.
In particular, many policy makers belive that the exponential growth of stablecoins is a bigger threat to established, government-backed currency than Bitcoin.
The launch of CBDC can be helpful in financial inclusion, reducing cost of banking system, etc. but is can certainly not be an alternative for cryptocurrency or Bitcoin in particular which is based on the principle of decentralization.