Fed Board Member: "No Need for Digital Dollar" ... Bitcoin Surges to $41,000

Advocating Innovation in Cryptocurrency Payment Systems
Supporting Normalization of Monetary Policy

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Christopher Waller, a member of the U.S. Federal Reserve (Fed) Board, expressed a skeptical stance on the introduction of a digital dollar. Bitcoin prices surged past the $41,000 mark on the back of this.

According to Business Insider, on the 5th (local time), Waller attended an event hosted by the conservative think tank 'American Enterprise Institute' and stated, "Improving payment speeds through private sector innovation could yield better results than the Fed introducing a digital dollar (CBDC)."

Waller added, "While CBDCs continue to attract interest in the U.S. and other countries, I am skeptical that a digital dollar can solve the major issues facing the U.S. payment system," and further explained, "I am not convinced that a digital dollar will resolve existing problems."

He continued, "Current innovations are progressing without a digital dollar," and argued, "Creating a faster payment system is not a reason to create a digital dollar."

Instead of a digital dollar, Waller suggested alternatives such as 'FedNow,' which the Fed is currently developing, or the small-value payment system centered on large commercial banks (RTP joint network).

Waller's remarks are seen as revealing significant internal conflict within the Fed regarding the introduction of a digital dollar.

Fed Chair Jerome Powell, during congressional testimony last month, announced that after extensive research, the Fed is expected to release a research report on the digital dollar in early September. Powell emphasized this as a key step to accelerate the Fed's efforts to issue a digital dollar.

Powell had predicted that if a digital dollar is issued, cryptocurrencies would find it difficult to become a major payment method in the U.S.

Following Waller's comments, Bitcoin prices rose vertically.

According to CoinMarketCap, Bitcoin prices soared to $41,200, up 3% compared to 24 hours earlier. Before Waller's remarks, Bitcoin was trading at $37,800.

Ethereum rose 4% due to the London hard fork impact and is trading at $2,800.

Meanwhile, in his speech that day, Waller predicted, "The Fed may withdraw accommodative monetary policy faster than others think." Waller also expressed high hopes for the July employment data from the Labor Department, which will be released the following day.

Earlier, Waller had mentioned that if new employment in July and August exceeds 800,000, the Fed could begin tapering asset purchases in October.