Christopher Waller, a Federal Reserve Governor, believes that stablecoins can help the US dollar maintain its role as the world’s dominant reserve currency when properly regulated.
Speaking at the Atlantic Council on February 6, Waller explained that stablecoins could expand the dollar’s reach in global payments and finance.
Waller stated, “What I see with stablecoins is they are going to open up possibilities and other ways of doing payments on the rails.” He sees them as a useful addition to the financial system, provided there are clear rules to ensure their backing and oversight.
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Waller also pointed out that stablecoins could make it harder for other countries to limit the dollar’s influence. “Right now, with dollarization in most countries, there are a lot of rules that have tried to stop it or prevent it,” he said.
However, he noted that digital currencies are more difficult to control than physical cash. “It’s a lot harder to stop stablecoins than confiscating currency that people might be hoarding in their bedroom; it’s a little harder to take it off the blockchain.”
Furthermore, Waller explained, “You might want regulatory rails around it to make sure the money is there, who is authorizing, who is checking to make sure it’s fully backed.” Clear regulations, he argues, would increase confidence in stablecoins and reinforce trust in the dollar.
A report from venture capital firm Andreessen Horowitz found that over 99% of stablecoins are tied to the US dollar, with Tether
Meanwhile, David Sacks, an advisor to President Donald Trump on cryptocurrency, recently discussed stablecoin regulation on CNBC’s Closing Bell Over Time. What did he say? Read the full story.
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