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Fed Board Governor Christopher Waller supports regulated stablecoins, as he believes they will help keep the US dollar as a global reserve currency.
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Federal Reserve Bank Governor Christopher Waller says he supports the adoption of stablecoins with clear rules and regulations because it will likely cement the US dollar’s status as a reserve currency.
Waller, chair of the Fed Board’s payments subcommittee, said in a Feb. 6 interview with think tank the Atlantic Council that stablecoins “will broaden the reach of the dollar across the globe and make it even more of a reserve currency than it is now.”
“What I see with stablecoins is they are going to open up possibilities and other ways of doing payments on the rails,” he said.
In Waller’s opinion, good regulation of stablecoins only strengthens the dollar as a reserve currency and its use in international trade, finance and investments.
An October report from venture capital firm Andreessen Horowitz found US dollars make up more than 99% of stablecoin currency shares, with the largest stablecoin by value, Tether (USDT), accounting for nearly 80% of stablecoin trading volume on average.
“I view stablecoins as a net addition to our payment system,” Waller said.
“You might want regulatory rails around it to make sure the money is there, who is authorizing, who is checking to make sure it’s fully backed,” he added.
There have been growing concerns that the US dollar could lose dominance as the world’s reserve currency and be the go-to currency for international transactions and commodity trades.
The intergovernmental organization BRICS, a coalition of countries including Brazil, Russia, India, China and South Africa, is pushing for international trade to move away from using the US dollar.
Related: Stablecoins will see explosive growth in 2025 as world embraces asset class
Waller says with the use of stablecoins, efforts by other countries to stifle the US dollar will be a lot more complicated.
“Right now, with dollarization in most countries, there are a lot of rules that have tried to stop it or prevent it,” Waller said.
“It’s a lot harder to stop stablecoins than confiscating currency that people might be hoarding in their bedroom; it’s a little harder to take it off the blockchain.”
An October Chainalysis report revealed that the US is lagging in stablecoin adoption, with the market share of stablecoin transactions on US-regulated exchanges dropping below 40% in 2024, while transactions on offshore exchanges rose to 60%.
It comes as US Senator Bill Hagerty introduced the GENIUS stablecoin bill to create a regulatory framework for high market cap US-pegged crypto tokens on Feb. 4.
The legislation proposes that stablecoins be defined as digital assets pegged to the US dollar. Federal Reserve regulations will govern issuers with tokens above $10 billion in market cap, while the states will regulate issuers below that threshold.
On the same day, US President Donald Trump’s crypto czar, David Sacks, confirmed plans to bring stablecoin innovation onshore, flagging it as a key area of focus, along with Bitcoin (BTC) adoption and blockchain development.
Stablecoin market capitalization has grown since mid-2023, surpassing $200 billion in January.
They also saw massive adoption in 2024, driven by the increased use of bots, with total stablecoin trans volumes reaching $27.6 trillion, surpassing the combined volumes of Visa and Mastercard by 7.7%.
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This article first appeared at Cointelegraph.com News
