U.S. Federal Reserve Board Governor Christopher J. Waller Delivered a speech at the American Enterprise Institute in Washington, D.C. on August 5, 2021, which questioned whether or not the US should issue a central bank digital currency arguing that a U.S. CBDC would not “solve any existing problem that is not being addressed more promptly and efficiently by other initiatives.”
Mr. Waller highlighted that his comments were in regards to “general purpose CBDCs” which “could be used by the general public, not just by banks or other specific types of institutions.”
After reciting, and rejecting, many of the arguments currently being proposed to support a U.S. CBDC, Mr. Waller concluded that “a CBDC remains a solution in search of a problem” and noted that he remains “skeptical that a Federal Reserve CBDC would solve any major problem confronting the U.S. payment system.”
CBDC’s, cryptocurrencies, and digital assets have often been proposed as a means to address the problem of the “unbanked.” His comments on this topic were particularly notable:
Could it be that too few people can access the payment system? Some argue that introducing a CBDC would improve financial inclusion by allowing the unbanked to more readily access financial services. To address this argument, we need to know, first, the size of the unbanked population, and second, whether the unbanked population would use a Federal Reserve CBDC account. According to a recent Federal Deposit Insurance Corporation (FDIC) survey, approximately 5.4 percent of U.S. households were unbanked in 2019.10 The FDIC survey also found that approximately 75 percent of the unbanked population “were not at all interested” or “not very interested” in having a bank account. If the same percentage of the unbanked population would not be interested in a Federal Reserve CBDC account, this means that a little more than 1 percent of U.S. households are both unbanked and potentially interested in a Federal Reserve CBDC account. It is implausible to me that developing a CBDC is the simplest, least costly way to reach this 1 percent of households. Instead, we could promote financial inclusion more efficiently by, for example, encouraging widespread use of low-cost commercial bank accounts through the Cities for Financial Empowerment Bank On project.
The full text of Mr. Waller’s speech can be found here.