Foreign CBDCs and stablecoins unlikely to threaten US dollar, says Fed vice chair
Randal Quarles, vice chair for supervision of the Federal Reserve Board of Governors, said he believed neither dollar-pegged stablecoins nor digital currencies issued by foreign central banks are likely major causes for concern for the U.S. dollar. In a prepared statement for the Annual Utah Bankers Association Convention Monday, Quarles said that foreign currencies — whether fiat or digital — would be unlikely to challenge the U.S. dollars role in the global economy. He cited the size of the U.S. economy, trade relationships with other nations, and “credible U.S. monetary policy” as reasons he believed even a central bank digital currency, or CBDC, issued abroad would pose little risk. “Its inevitable that, as the global economy and financial system continue to evolve, some foreign currencies (including some foreign CBDCs) will be used more in international transactions than they currently are,” said Quarles. “It seems unlikely, however, that the dollars status as a global reserve currency, or the dollars role as the dominant currency in international financial transactions, will be threatened by a foreign CBDC.” Quarles comments on stablecoins pegged to the U.S. dollar were also seemingly lacking urgency. Though the Fed vice chair said there was a “legitimate and strong regulatory interest in