Digital dollar would put Fed in direct competition with banks, Fed’s Waller says
Federal Reserve Governor Chris Waller, a professed skeptic when it comes to the Fed launching a central bank digital currency, thinks the public is confused about the issue.
During a moderated discussion hosted by OMFIF, a forum for central bank policy, Waller said on Thursday that, at its core, a decision to by the Fed to issue a central bank digital dollar would put the central bank in direct competition with banks and their payment systems. This is akin to the federal government deciding to compete with Tesla to make cheaper electric cars, he said.
For a century, the Fed had generally stepped back and let private banks conduct retail payments for households and firms. The Fed’s main job has been in the back room, making sure that payments flow smoothly, Waller explained.
“With a central bank digital currency, you’re asking a very direct question. Should the central bank be more involved…
