Federal Reserve Gov. Chris Waller again expressed doubt about deploying a digital dollar Thursday, saying it would put the Fed in competition with the banking system.
“With a central bank digital currency, you’re asking a very direct question,” he said at a central bank policy conference, according to MarketWatch.
“Should the central bank be more involved in processing payments for households and firms in a way that allows them to circumvent the banking system? That is what a CBDC [central bank digital currency] account is doing.” Waller said.
In other words, “should you compete with the banking system or not?” he said.
Congress should have final say on a digital central bank currency, not the Fed, Waller said. The Fed is due to release a report on the issue soon.
Bitcoin hit a record high of $66,930 Tuesday amid enthusiasm over the launch of the first bitcoin futures exchange-traded fund in the U.S. bitcoin recently traded at $62,618, down 5%.
The bitcoin debate continues to rage among bulls and bears.
Bulls say bitcoin’s use as a medium of exchange in normal commercial transactions will grow.
Bears point out that few consumers and companies will want to use such an unstable currency.
Bitcoin bulls say the digital asset is a hedge against inflation and a store of value. Bears note that the only thing bitcoin has proved to be so far is a vehicle for speculation.
The bulls also maintain that the currency can protect investors against declines in other markets, like stocks. But the bears note that since bitcoin was created in 2009, no sustained drop in stocks has occurred to test that theory.