- Christopher Waller calls for stablecoin regulations to expand the US dollar’s global use.
- Stablecoins can improve payments and offer a stable store of value in inflation-hit areas.
- Clear regulations are needed to ensure stablecoin growth without stifling innovation.
Federal Reserve Governor for the United States Christopher Waller opined that stablecoins could extend the use of the US dollar even more. He called for regulation of the banking system, enabling it to offer dollar-linked digital currencies. Waller spoke at a conference in San Francisco, emphasizing the stability of stablecoins to enhance retail and cross-border payments.
Stablecoins as Financial Solutions
Waller explained that stablecoins are a significant development in the crypto-economy sphere. He agreed with their capacity to improve payments and offer better savings in inflationary zones. Stablecoins can also help advance financial security by enabling the accessibility of US dollars in regions where the formal financial sector is weak.
Waller said that the stablecoin market has grown, and it is high time to regulate it. This includes pushing for a monetary framework that can address the risks directly associated with stablecoins. Waller claimed that banks and non-banks should be able to operate under the same legal framework for stablecoin issuance.
These considerations made Waller optimistic about private entities embracing stablecoin solutions for businesses and consumers. He pointed out that the public sector’s obligations include establishing the right rules. These regulations would create a safe place where market participants could work and experiment.
Challenges in US Regulations
The Fed governor also reflected on the current functional applications of stablecoins. They provide people with a store of value in crypto trading, cross-border transactions, and inflation hedges. Nevertheless, he noted that there are still many limitations to retail payments made with stablecoins.
Waller stated that the US environment has been cited as having poor coordination and ambiguous laws. He noted the disconnection between State and international rules and said fair rules should enable safety measures without sacrificing innovation.
Related: Stablecoins Offer Financial Growth, but Policy Doubt Lingers
In a previous talk on February 6, he equated stablecoins to “synthetic dollars.” He highlighted that stablecoin can present new opportunities for payments and increase competition. He encourages their growth as long as those payments are quicker and less costly for everyone.
Waller encouraged further advancement in stablecoin technology by the private sector. He emphasized that there should be less ambiguous and consistent rules to create a favorable innovation environment. Regulated stablecoins could go a long way toward serving the consumer and the economy.
