The Federal Reserve’s Governor Claims That Blockchain Technology Is “Totally Overrated” And That Cryptocurrency Is “Just Electronic Gold.”
Christopher Waller, an American economist and member of the Federal Reserve Board of Governors, believes that blockchain technology is “totally overrated,” even though the United States central bank has “invested a significant amount of resources” to understanding digital currencies blockchain Waller spoke on a panel on Friday. on central bank digital currencies (CBDCs), during which he said that CBDC white papers were akin to “infomercials” and that CBDC white papers should be treated as such.
‘These Things Aren’t Payment Instruments at All,’ insists the Federal Reserve’s governor.
On Friday, a virtual panel consisting of Gary Gorton of Yale University, Hyun Song Shin, a senior BIS official (BIS), and Christopher Waller of the Federal Reserve addressed blockchain technology and CBDCs in depth. Should Central Banks Issue Digital Currencies? expressed strong reservations about using such technology.
During the virtual panel, Waller stated that “these things aren’t payment instruments at all.” I believe these items are nothing more than electrical gold. They are kinds of wealth storage that may be used to transport riches across time. Take a peek at some art or at some baseball cards. Think about how much money individuals are spending on things that aren’t even used and holding onto because they believe they will be able to sell them later and recoup their investment.”
Waller went on to say that he doesn’t believe blockchain technology is efficient and that there is much too much hype around the technology. The governor of the Federal Reserve explained:
He has expressed scepticism in the past about CBDCs and stable coins. For example, Waller has said that China’s CBDC does not “threaten the dollar.”
When Waller spoke with the Cleveland Federal Reserve members in a virtual conference call in mid-November last year, he addressed the use of fiat-pegged digital currencies and the application of rules to the stable coin sector. Following Waller’s comments at the Cleveland Fed’s virtual conference in October, he informed attendees at an OMFIF discussion that the Fed would be unlikely to issue a CBDC or digital currency.
While participating in Friday’s virtual conversation on central banking and digital currencies, Waller reaffirmed his pessimism questioning whether the Fed is required to create a CBDC. For the time being, he does not believe that a central bank digital currency in the United States is necessary.
To avoid becoming overwhelmed by the bells and whistles that come with it, Waller attempts to concentrate on why we actually need the system. “I haven’t concluded on yet.” It’s not that I can’t be, but I haven’t seen that on the retail CBDC side.”
In addition to addressing the United States, Waller also discussed China’s CBDC, emphasising that he does not think the digital yuan poses a threat to the dollar. In his Friday commentary, Waller questioned: “what the [Chinese central bank] has done.”
“They’ve permitted Chinese families to open a bank account with the People’s Bank of China so that they may pay their electricity bills. ” The existence of payment accounts at a central bank does not seem to pose any kind of danger to the dollar in any way, shape, or form.”