FED discusses the future of digital currency and payments: Stablecoins will consolidate the dominance of the US dollar, there is no need to forcefully introduce CBDC

Federal Reserve Board Governor Christopher Waller delved into the future development of digital currencies, Stablecoins, and Central Bank Digital Currencies (CBDC) at a discussion on 2/9 at the Atlantic Council. Waller emphasized that the U.S. payment system is already very mature and currently will not adopt CBDC. However, we may see more applications of Stablecoins and commercial bank digital assets in the future, with the key being whether regulation can keep pace.

The necessity of CBDC, Waller said he has not seen a clear demand yet

Currently, 130 countries around the world are studying the development and application of CBDC. Nearly 60 countries, including China, the European Union, and the United Kingdom, have entered the pilot phase. However, Waller is reserved about this and believes that the payment system in the United States is already quite stable and there is no clear need for using CBDC.

Waller also asked at the symposium: 'What problems can CBDC really solve? Currently, no one can give a convincing answer.' He believes that the FED has long been responsible for back-end settlements, allowing banks to handle payment transactions with consumers. The concept of CBDC now requires the Central Bank to directly face consumers, which may violate the long-standing financial operation model in the United States.

In addition, he also criticized the way some Central Banks implement CBDC, saying, 'This reminds me of TV shopping commercials, constantly promoting what this thing can do, what that thing can do, but without really explaining why it is needed.'

Continuing to develop CBDC globally without affecting the status of the US dollar.

Currently, the EU, the UK, and Japan are all promoting their own CBDCs, and it is expected that digital euros, digital pounds, and digital yen will be officially launched by 2030. However, as to whether this will affect the status of the US dollar as the global reserve currency, Waller remains quite calm, believing that the CBDCs of these countries are mainly digital versions of bank deposits and will not affect the global financial order.

He emphasized, "The core competitiveness of the US dollar lies not in technology, but in being the world's largest economy, a deep capital market, and a stable legal environment." Even if other countries introduce CBDC, it will not change the fact that international trade and the financial system are still dominated by the US dollar.

China is promoting e-CNY to strengthen its international payment position, and the United States is not worried.

China has been actively promoting the digital Renminbi (e-CNY), even strengthening its position in the international payment system through the mBridge project. Regarding whether this will weaken the international status of the US dollar, Waller believes the impact is limited. He said, 'If some countries only want to do business with the Asian market and don't care about trading with the United States or Europe, then they can choose to use the digital Renminbi (e-CNY). But if they want to connect with the global economy, they will ultimately have to return to the dollar system.'

He further pointed out that the key to the USD system is not just the coin, but the United States' possession of the strongest financial infrastructure in the world, including the depth of capital markets, the transparency of the legal system, and a powerful global financial network. These advantages keep the USD strong and cannot be replaced solely by digital technology.

Stablecoin will become one of the main payment options, and cash still holds considerable value.

When it comes to the future payment ecosystem, Waller believes that traditional commercial bank deposits are still mainstream, but Stable Coin (Stablecoin) may bring more innovation. For example, consumers may choose to transfer payments using bank accounts in the future, or switch to Stable Coin wallets for payment, similar to the current options of credit cards and mobile payments.

However, Waller also emphasized that although the demand for cash is declining, there is still a large market. He gave an example: "I haven't used cash in the United States for over a year and a half, but the global demand for US dollar banknotes is still growing at a rate of 6-7% per year." He added that even as digital payments become more popular, cash still plays an important role as a "store of value" and may not completely disappear in the next few decades.

The US dollar remains the top choice for global trade, the key lies in its attractiveness

Regarding the discussion of 'de-dollarization,' Waller believes that this will not become a reality. He pointed out, 'We do not force anyone to use the dollar, it is their own choice.' He gave an example that when a Japanese company does business with a German company, they usually still choose to settle in dollars, because the dollar provides the deepest liquidity and the most reliable payment system.

However, Waller also emphasized that the United States cannot be complacent and must continuously upgrade its financial infrastructure to ensure that the payment system is fast, secure, and stable, in order to maintain attractiveness to other countries.

The development of digital coin, the United States will still maintain its leading position

In summary, Waller conveys several key messages. He states that the United States is not in a hurry to launch a Central Bank Digital Coin (CBDC) because the existing financial system is already very stable. The future focus should be more on regulation and technological advancements rather than purely chasing the trend of digital coins. Regarding future payment developments, he believes that:

Stable Coin may become a new payment tool, but it needs regulation.

CBDC does not have an urgent demand in the United States, as its own financial system is quite stable.

The digital coins of countries such as China will not threaten the global reserve status of the US dollar.

The strength of the US dollar comes from global market trust, not just technological development.

(Ban CBDC! Trump's new executive order strongly promotes blockchain, establishes the Stable Coin Act, and consolidates the sovereignty of the US dollar)

This article FED talks about the future of digital coins and payments: Stable Coin will consolidate the dominance of the US dollar, no need to rush into CBDC first appeared on ChainNews ABMedia.