The American economist and member of the Federal Reserve Board of Governors, Christopher Waller, believes blockchain technology is “totally overrated,” even though the U.S. central bank “put a lot of resources into understanding digital currencies and the blockchain.” On Friday, Waller spoke during a panel that discussed central bank digital currencies (CBDCs) and said that CBDC white papers were similar to “infomercials.”
Fed Governor Insists: ‘These Things Aren’t Payment Instruments at All’
On Friday, a virtual panel made up of Yale’s Gary Gorton, Bank for International Settlements (BIS) executive Hyun Song Shin, and the Fed’s Christopher Waller discussed blockchain technology and CBDCs at great length. The hour-long panel discussion was called “Should Central Bank Issue Digital Currencies?” and Waller is very skeptical about such technologies.
“These things aren’t payment instruments at all,” Waller remarked during the virtual panel. “My view is these things are just electronic gold. They’re forms of storage carrying wealth across time. Look at art, look at baseball cards. Look at all of this stuff that’s intrinsically useless that people pay a lot of money and hold on to because they think they can sell it later and get their money back.”
Waller further stressed that he doesn’t think blockchain technology is efficient, and he thinks there’s too much hype surrounding it. The Fed governor explained:
“I think blockchain is totally overrated — The question is is it the most efficient way to do stuff? We know distributed ledger blockchain is one way of doing transactions and record-keeping, but it’s not efficient.“
Waller Has Been Skeptical About CBDCs and Stablecoins in the Past — Fed Governor Says China’s CBDC Doesn’t ‘Threaten the Dollar’
In mid-November last year, Waller commented on fiat-pegged digital currencies during a virtual conference with members of the Cleveland Fed, and he discussed applying regulations to the stablecoin economy. Prior to the Cleveland Fed virtual conference statements, Waller told participants at an Official Monetary and Financial Institutions Forum (OMFIF) discussion in October that he was skeptical about the Fed issuing a CBDC or digital dollar.
During Friday’s virtual discussion on central banking and digital currencies, Waller reiterated his skepticism over whether or not the Fed really needs to issue a CBDC. So far he has not been convinced that there’s a need for a central bank digital currency in the United States.
“I’m trying to focus on why do we really need it as opposed to look at all the bells and whistles that come along with it,” Waller said. “I haven’t been convinced about [it] yet. It’s not saying that I can’t be, but I haven’t seen that on retail CBDC.”
In addition to discussing the U.S., Waller also talked about China’s CBDC and he stressed that he doesn’t believe the digital yuan threatens the U.S. dollar. “What has the [central bank of China] done,” Waller opined on Friday. “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.”