Fed governor calls crypto ‘just electronic gold’

Federal Reserve Governor Christopher Waller on Friday played down the functionality of cryptocurrencies conjunctival phrase again while His skepticism about central bank has Adopting digital currency When Consumers already-have access to fast payment systems.

“These things arent payment instruments at all,” Waller Said of cryptocurrencies During a virtual panel central bank is digital currencies. “My view is thesis things are just electronic gold. They’re carrying forms of storage wealth across time. Look at art, look at baseball cards. Look at all of this stuff that’s useless Intrinsically That People pay a lot of money and hold on to Because They Think They Can sell it later and get Their money back. “

The Fed governor aussi Thinks blockchain is not All That Useful right now.

“I think Blockchain is totally overrated,” he said. “The issue is it is the MOST effective way to do stuff? We know blockchain distributed ledger is one way of doing transactions and record keeping, goal it’s not efficient. “

A cryptocurrency representations of Bitcoin is seen in front of a stock graph and US dollar in this picture taken, January 24, 2022. REUTERS / Dado Ruvic / Illustration

His comments on blockchain and crypto overall cam amidst a panel debate on the validity of central bank digital currencies (CBDC) and Their impact on the overall financial system. Waller reiterated His skepticism of Adopting a CBDC, Noting That Consumers already-have access to faster payments without one.

He questioned whether the Fed should change its 100-year old position of staying in the background of the payment system and take a more forward role in processing payments for consumers and businesses, sidestepping banks. He liked research papers on CBDCs to infomercials, questioning why the US would need a CBDC.

“I’m try trying to focus it why do we really need it as Opposed to look at all the bells and whistles That come along with it,” Said Waller. “I have not-been Convinced about yet. It’s Not Saying That I can not be, I have not seen purpose That is CBDC retail. “

While the US mulls over the pros and cons of Adopting a CBDC, other central banks around the world are aussi toying with the idea and Some are already testing em. Many-have called Expired the race to adopt a CBDC the “digital currency space race” where Those That Fall Behind Their currencies threatened This May see. Purpose Waller says he does not think other central bank digital currencies, notably China’s, presents a risk to the US dollar.

WASHINGTON, DC - FEBRUARY 13: Christopher Waller testifies before the Senate Banking, Housing and Urban Affairs Committee During a hearing on Their appointment to be member-designata on the Federal Reserve Board of Governors on February 13, 2020 in Washington, DC.  (Photo by Sarah Silbiger / Getty Images)

Christopher Waller testifies before the Senate Banking, Housing and Urban Affairs Committee During a hearing on Their appointment to be member-designata on the Federal Reserve Board of Governors on February 13, 2020 in Washington, DC. (Photo by Sarah Silbiger / Getty Images)

“What has the [People’s Bank of China] therefore, “Waller said. “They’ve allowed Chinese households to have a bank account with the PBOC so they can pay their electric bill… I don’t see how having payment accounts at a central bank threatens the dollar in any way, shape, or form.”

On the flip side, he Said Waller Could See how retail direct access to a US CBDC at the Fed Could Threaten currencies in other countries if foreigners are permitted to-have accounts at the Fed.

“There’ll be Such a rush of demand for That Other gouvernements thesis accounts and other central banks Would have a problem,” he said.

He added That Any currency that’s pegged to the US dollar, gold stablecoin that’s pegged to the dollar, imports US monetary policy and amplified US policy not diminishes it.

Waller’s comments come after-Fed Chair Jay Powell was CBDC. The Fed Has not made a decision whether to Pursue it has yet CBDC, Said Powell, though it’s collaborating with other central banks is CBDCs, Addressing frictions in international payments, and finding consensus On Some principles. Powell on Wednesday Said digital innovation in the financial sector is here to stay and with it, new regulations will need to be created.

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