The deputy chairman of the Fed believes that foreign stablecoins will not be able to become a serious threat to the US dollar. Despite the fears of some financial experts.
Randal Quarles shared his vision of the situation around European central banks and their practice of creating their own CBDCs, stating that neither stablecoins pegged to the US dollar nor digital currencies issued by central banks of foreign countries are a cause for concern for the US dollar. In his opinion, stablecoins today cause quite natural interest among regulators, and the “dollar stablecoin” could support its fiat counterpart, simplifying and reducing the cost of international payments. But in the event of the issuance of a digital dollar by the Fed, consumers who benefit from competition between banking structures may suffer. In addition, the digital currency issued at the federal level will become a significant obstacle to innovation in the private sector and will limit the availability of many services to the population from commercial banks.
In urging not to worry about the dominance of the dollar as more digital currencies enter the market, Quarles cited several reasons. Among them, he mentioned the size of the US economy on a global scale, the country's “credible” monetary policy, and trade relations with several of the world's largest states.
As the global economy develops, foreign currencies (including CBDCs) will inevitably emerge that will be more in demand in international transactions than they are today. However, Quarles is convinced that this will not undermine the dollar's dominant position as the world's reserve currency. Among other assets that also do not threaten the dollar, the FRS representative also named bitcoin, having previously described it as "a risky and speculative investment of funds".