Waller: Stablecoins Create Dollar Intermediation Channels

Christopher Waller, a member of the U.S. Federal Reserve, stated that stablecoins and tokenized assets are changing the way the dollar is circulated internationally. At the "International Role of the Dollar" conference held in Washington D.C. on June 22, he discussed the impact of digital assets on the international role of the dollar. Waller explained that the scale and trust of the U.S. economy and financial markets are the traditional foundations of the dollar, while emphasizing that technological innovations are transforming the ways in which dollars are held and transferred. He mentioned that distributed ledger technology and stablecoins are creating new intermediation channels for the dollar in conjunction with the existing banking system. The meeting schedule of the Federal Reserve and the New York Fed included discussions on stablecoin transactions and blockchain-based financial infrastructure. Waller added that it is necessary to study whether stablecoins will enhance the international role of the dollar or create new tensions. The Bank for International Settlements analyzed that stablecoins are likely to reinforce the existing currency hierarchy initially, but pointed out that stablecoins in their current form do not sufficiently meet the core properties of money.