Why Fed’s Waller Thinks Everyone Should Print Money – Oh, the Madness of Stablecoins!

Ah, dear reader, gather ‘round as we tread the hallowed halls of monetary discourse! The illustrious Christopher Waller, a luminary from the United States Federal Reserve, has triumphantly declared that stablecoins—the charming digital doppelgängers of our beloved dollar—should sashay into existence at the hands of both banks and non-bank entities.

At an assemblage of noble minds in San Francisco on Feb. 12, our gallant Waller opined that these delightful “stablecoins” could waltz into the limelight, expanding the reach of the all-mighty dollar and tantalizing us with their promise of improving both retail and cross-border payments. Truly, they are the darlings of the crypto ecosystem!

Alas, our gallant governor asserts that this blooming market demands a regulatory framework—a rather melodramatic term, wouldn’t you agree?—to address the whimsical risks associated with this brave new world of digital currency. Tsk, tsk! The poor non-banks and banks alike should be granted the exhilarating opportunity to issue stablecoins, lest we stifle their creative spirits!

“This framework should allow both non-banks and banks to issue regulated stablecoins and should consider the effects of regulation on the payments landscape, including competing payment instruments.”

With the confidence of a cat strolling through a room full of rocking chairs, Waller proclaimed his belief in the private sector’s cunning ability to conjure stablecoin solutions that will delight both the hapless consumer and the wandering businessman. His call for clarity in regulations resounded like an echo in a grand hall.

He acknowledged the noble use cases of stablecoins—providing a safe refuge within the crypto storm, granting access to greenbacks, and facilitating those pesky cross-border payments, which he lamented are distressingly limited. Yet, fear not; for many spirited private sector pioneers are gallivanting about, devising ways to support the burgeoning realm of retail payments with stablecoins!

But before we pop the champagne, let us not forget the lurking shadows of challenges: a regulatory maze of confusion in the US, the disarray of state and international regulations—a veritable circus! And let’s not dawdle past the risks of these fanciful “depegs” and their potential follies.

Earlier this month, while regaling attendees at the Atlantic Council on Feb. 6, Waller likened stablecoins to “synthetic dollars,” as if we were indulging in delightful contrivances of modern finance! He waxed poetic about their ability to expand competition and elevate the payment system, driving down costs—what a valiant aspiration!

“If they can do that in a way that opens competition, broadens the reach of the payment system, drives down costs, makes things faster and cheaper, I’m all for it.”

In a flourish befitting a true maestro, Waller expressed his fervent hope that the stablecoin market would thrive or wither based on the merits of their contributions to consumers and the grand economy. Will the fates be kind?

As our narrative winds to a close, Waller reminded us that the private sector must perpetually cultivate innovative solutions to meet market desires. Meanwhile, the public sector, with all its pomp and circumstance, needs to craft coherent and equitable legal frameworks that stretch across states and borders—a noble call for synergy in a tumultuous sea!

2025-02-13 07:03

Why Fed’s Waller Thinks Everyone Should Print Money – Oh, the Madness of Stablecoins!

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