No one has provided a satisfactory answer about the need for a central bank digital currency, Federal Reserve Governor Christopher Waller said today. In a Q&A during an economic conference at the Brookings Institution in Washington, D.C., Waller said he has asked other economists what market failure in the payments system ecosystem could only be resolved by a CBDC. No one has yet provided an answer, he said.
“So it makes me think that a CBDC is something you could do, but there’s nothing that makes you need it,” Waller said. “The general point is… the banking system works well. People are happy with their bank accounts for the most part and [have]general access to everything. So it’s not really clear what you’re going to gain by having a central bank digital currency over the current payment system.”
Asked why the Fed is exploring a CBDC, Waller said that the central bank needs to be prepared should Congress direct it to create a digital currency. “It’s just trying to understand the technology so that if one day Congress said you need to do it, we can do it,” he said.