Fed Governor Christopher Waller Says US CBDC Not Necessary for Dollar’s Supremacy

Federal Reserve Governor Christopher Waller on Friday expressed his hesitation towards the creation of a U.S. central bank digital currency, saying that the digital currency is likely not important to the long-term status of the U.S. dollar.

Waller made such comments while delivering a speech at a symposium sponsored by the Harvard National Security Journal in Cambridge, Massachusetts, on Friday.


The Fed governor said although his views on central bank digital currencies (CBDCs) are well known, he remains strongly unconvinced that there is a compelling need for the Fed to create a digital currency.

Waller said those who advocate for the development of a U.S. CBDC often say how it is significant for the long-term status of the dollar, especially as other major jurisdictions are moving towards adopting a CBDC.

He disagreed with such claims, stating that: “The underlying reasons for why the dollar is the dominant currency have little to do with technology, and I believe the introduction of a CBDC would not affect those underlying reasons.”

The Fed governor explained what could occur to the dollar’s role as the global reserve currency of choice if other countries adopted the digital currencies and the U.S. did not. He said factors making the dollar attractive for holding value and conducting international business would remain majorly unchanged, and the challenges that a CBDC might resolve could be achieved through other means.

Waller said: “The dollar serves as a safe, stable, and dependable form of money around the world. I don’t think there are implications here for the role of the United States in the global economy and financial system.” He, therefore, said people should instead focus and talk about the relevant CBDC-related topics, such as its impacts on financial stability, payment system improvements, and financial inclusion.

Waller’s comments come as a response to recent arguments posted by his fellow board members and other lawmakers favoring the introduction of a US CBDC.

 In July, Fed Vice Chair Lael Brainard said a CBDC would be a “natural evolution” of the payments system, saying the digital currency could play a key role in protecting financial stability. Lawmakers like Rep. Jim Himes, D-Connecticut, have also been outspoken advocates for the establishment of a U.S. central bank digital currency.

The digital currency remains a hot topic for the US government. In March, President Joe Biden issued an executive order on digital assets. And based on the report, Biden wants the US to lead in a space that China is far more advanced in with its digital Yuan projects. But a digital dollar could take years to develop because different stakeholders see multiple problems with rolling out a digital currency from the Federal Reserve.

Image source: Shutterstock


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Hillary Clinton Fears Cryptocurrency Could Undermine US Dollar and Destabilize Nation States

Hillary Clinton, the former US secretary of state under President Barrack Obama, warned all countries to take the rising popularity of crypto coins seriously because such instruments have the potential to undermine the role of the US dollar and the power of nation-states in the global economy.

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The former democratic presidential candidate made the comments via a video panel discussion at the Bloomberg New Economy Forum in Singapore on November 19. She stated: “One more area that I hope nation-states start paying greater attention to is the rise of cryptocurrency — because what looks like a very interesting and somewhat exotic effort to literally mine new coins in order to trade with them has the potential for undermining currencies, the role of the dollar as the reserve currency, for destabilizing nations, perhaps starting with small ones but going much larger.”

Such remarks indicate that Clinton is not a fan of cryptocurrencies. She warned about the rise of new cryptocurrency technologies amid complex relations between the US, China, and Russia. She thinks that widespread adoption of crypto assets could undermine traditional currencies, including the dollar, and destabilize countries, small and big.

Clinton, whose 2016 presidential campaign was marred by hacks, mentioned Russia as an example that could use cyber tactics and cryptocurrencies to weaken other countries. She accused Russia’s President Vladimir Putin of deploying “a very large stable of hackers and those who deal in disinformation and cyberwarfare.”

The Future of Cryptocurrency Is Complicated

Clinton’s concerns regarding the potential of cryptocurrency to destabilize countries are valid.

Crypto investment goes against every basic rule of investor protection. Such coins trade on platforms that don’t have any of the safety mechanisms that traditional exchanges have.

The legal status of cryptocurrency varies substantially from country to country; while in some jurisdictions, the relationship remains to be properly designed or is continuously changing.

Some nations have placed limitations on the way crypto can be used, with banks banning their customers from making crypto transactions. Other nations such as China, have banned the use of Bitcoin and altcoins outright with heavy penalties in place for anyone making such transactions.

The US recently passed the $1 trillion infrastructure bill that will bring tougher rules on crypto trading taxes.

However, some developing countries are embracing crypto assets, with El Salvador adopting Bitcoin as a legal tender as a way of improving the economy and Zimbabwe is seen trying to follow the same path.

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Shiba Inu in danger of ‘topping signal’ as SHIB price loses 50% in 3 weeks

Meme-cryptocurrency Shiba Inu (SHIB) has lost more than 50% of its market valuation in three weeks since its all-time highs in late October.

SHIB price dropped to as low as $0.00004251 on Nov. 19 after correcting by almost 55% from its all-time high of $0.00008854. Its price recovered a small portion of its losses on Friday, but the move looked indecisive due to weaker trade volumes, i.e., not many traders supported the rebound trend.

Some analysts noted that a sharp pullback in the Shiba Inu market was unavoidable after its price skyrocketed by more than 1,100% since Oct. 1.

For instance, an independent market analyst, under the pseudonym John Wick, called SHIB’s ongoing price correction a “topping signal,” thus suggesting additional selloffs in the sessions ahead.

SHIB/USD four-hour price chart. Source: TradingView, John Wick

“Buying the dips”

Price swings of 50% or more are not too uncommon in the cryptocurrency market. For example, Bitcoin had plunged from around $65,000 to below $30,000 in less than thirty days earlier this year. But later, BTC rebounded to establish a new record high at $69,000.

At the core of Bitcoin’s volatile rebound was a well-circulated narrative that projected it as a hedge against rising inflation all across the world. Meanwhile, for Shiba Inu, the core bullish narrative remains “community,” as stated by one of the coin’s most popular endorsers, David Gokhshtein.

The founder of Gokhshtein Media and CEO of PAC Protocol reminded that Shiba Inu’s bullish performance this year has come on the back of strengthening community support and despite absence of major endorsements by celebrities and billionaires.

Gokhshtein tweeted Friday asking his followers who among them are “buying the dips,” thus also reiterating his faith in a potential SHIB price rebound even after a 50%-plus price correction.

Bul technical outlook

Shiba Inu’s ongoing price correction had it trend lower inside what appeared like a Bull Flag range, raising possibilities that the coin would continue its move higher in the future.

In detail, Bull Flags occurs as a brief pause in the trend after a strong price move higher.

Related: Supersize McShib: Shiba Inu the largest ERC-20 holding among ETH whales

The pattern looks like a downward sloping channel/rectangle represented by two parallel falling trendlines. Typically, Bull Flags result in price breaking out of the upper trendline to levels at length equal to the height of the previous uptrend (called Flagpole).

SHIB/USDT daily price chart featuring Bull Flag. Source: TradingView

With that said, SHIB’s next attempt to break above its Flag’s upper trendline, if accompanied by a rise in trading volume, could result in a price leg higher toward $0.00010000.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.