-
Fed
Gov.
Christopher
Waller,
one
of
seven
on
the
central
bank’s
board,
says
the
crypto
industry’s
effect
on
the
dollar
seems
to
actually
be
a
help,
so
far. -
As
long
as
stablecoins
are
tied
to
the
dollar
–
as
99%
of
those
tokens
are
now
–
they’re
increasing
the
U.S.
currency’s
global
strength.
Crypto
critics
often
warn
of
digital
currencies’
potential
to
destabilize
the
U.S.
dollar,
but
Federal
Reserve
Gov.
Christopher
Waller
argued
that
stablecoins’
dependence
on
the
dollar
could
actually
strengthen
the
U.S.
fiat
currency
as
decentralized
finance
(DeFi)
catches
on.
“People
often
conjecture
that
cryptocurrencies
like
bitcoin
may
replace
the
U.S.
dollar
as
the
world’s
reserve
currency,”
Waller
said
at
an
event
Thursday
in
the
Bahamas.
But
he
noted
that
most
DeFi
trading
uses
stablecoins,
and
99%
of
the
market
value
of
those
tokens
is
tied
to
the
value
of
the
dollar.
“So
it
is
likely
that
any
expansion
of
trading
in
the
DeFi
world
will
simply
strengthen
the
dominant
role
of
the
dollar.”
Waller,
who
was
appointed
to
the
board
in
2020
by
then-President
Donald
Trump,
did
acknowledge
that
a
future
in
which
people
shifted
from
using
dollars
to
using
digital
currencies
could
still
be
a
monetary-policy
danger.
But
he
argued
Thursday
that
the
repeated
rhetoric
about
the
decline
of
the
dollar
as
the
global
reserve
currency
is
hollow.
“Recent
developments
that
some
have
warned
could
threaten
that
status
have,
if
anything,
strengthened
it,
at
least
so
far,”
he
said.
The
stablecoin
sector
–
dominated
by
Tether
(USDT)
and
Circle
(USDC)
–
is
at
the
center
of
crypto
trading,
acting
as
steady
assets
used
to
trade
in
and
out
of
more
volatile
tokens.
And
some
expect
those
utilitarian
digital
assets
to
balloon
dramatically
in
the
coming
years,
potentially
into
the
trillions
of
dollars.
The
strength
of
the
dollar
is
vital
to
the
U.S.
economy
and
its
foreign-policy
interests,
though
that
kind
of
government-based
monetary
dominance
would
be
good
to
undermine,
according
to
many
crypto
enthusiasts.