{"id":315886,"date":"2021-08-05T19:28:17","date_gmt":"2021-08-05T16:28:17","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/fed-governor-says-cbdcs-remain-a-solution-in-search-of-a-problem\/"},"modified":"2021-08-05T19:28:17","modified_gmt":"2021-08-05T16:28:17","slug":"fed-governor-says-cbdcs-remain-a-solution-in-search-of-a-problem","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/fed-governor-says-cbdcs-remain-a-solution-in-search-of-a-problem\/","title":{"rendered":"# Fed governor says CBDCs remain ‘a solution in search of a problem’"},"content":{"rendered":"

“# Fed governor says CBDCs remain ‘a solution in search of a problem’ <\/strong>”<\/p>\n

Chris Waller, a member of the Board of Governors of the Federal Reserve System, seems to think it\u2019s unnecessary for the U.S. government to develop a central bank digital currency.<\/p>\n

Speaking with Michael Strain of the American Enterprise Institute today, Waller said<\/a> he was \u201chighly skeptical\u201d of a central bank digital currency, or CBDC, addressing issues in existing payment systems. He feels that the U.S. government should only intervene with a potential digital solution in the event of significant market failures. <\/p>\n

\u201cI am not convinced as of yet that a CBDC would solve any existing problem that is not being addressed more promptly and efficiently by other initiatives,\u201d said Waller.<\/p>\n

He added:<\/p>\n

\u201cThe private sector is already developing cheaper payment alternatives to compete with the banking system, hence it seems unnecessary for the Federal Reserve to create a CBDC to drive down payment [systems] we see by banks […] Facilitating speedier payments is not a compelling reason to create a CBDC.\u201d <\/p><\/blockquote>\n

Screenshot from American Enterprise Institute<\/em><\/figcaption><\/figure>\n

Specifically, the Fed governor said he believed the government should not be competing with the private sector given the potential benefits of a CBDC may be outweighed by privacy concerns and would likely not address the issue of financial inclusion or encourage faster and cheaper payments. Waller cited a 2019 survey from the Federal Deposit Insurance Corporation, estimating<\/a> that only 1% of households in the United States were both unbanked and might be interested in using a CBDC.<\/p>\n

Related: <\/em><\/strong>Fed Chair says stablecoins need stricter regulation, speaks on CBDC<\/em><\/strong><\/p>\n

However, Waller also expressed concern with potential CBDC designs giving the Fed access to \u201ca vast amount of information\u201d from account holders. According to the Fed governor, The system would make it a tempting target for hackers, and be more akin to China monitoring the transactions of its citizens with the digital yuan. <\/p>\n

\u201cA CBDC remains a solution in search of a problem.\u201d<\/p><\/blockquote>\n

Waller\u2019s comments come two months after Fed chair Jerome Powell said the government agency would be issuing a discussion paper on CBDCs in the United States, calling on the public to comment \u201con issues related to payments, financial inclusion, data privacy, and information security.\u201d Powell said the paper would be released sometime this summer, giving the Fed roughly six more weeks to publish. <\/p>\n

Unlike Waller, Powell\u2019s public statements on CBDCs have seemingly been more measured, often saying it is more important \u201cto get it right than it is to be first\u201d when it comes to rolling out a digital dollar. President of the Dallas Federal Reserve Robert Kaplan also said in November that it is \u201ccritical that the Fed focuses on developing a digital currency.\u201d <\/p>\n

Other U.S. lawmakers have spoken in favor of CBDCs when comparing a central bank issued digital currency with cryptocurrencies like Bitcoin (BTC). Democratic Senator Elizabeth Warren said in June that the tokens had \u201cgreat promise,\u201d calling CBDCs “legitimate digital public money\u201d that could drive out \u201cbogus digital private money\u201d like crypto. <\/p>\n