Federal Reserve governor sees dollar expansion; Bank of England official predicts tokenized deposits will dominate
Federal Reserve governor Christopher Waller and Bank of England policymaker Megan Greene offered starkly different forecasts for stablecoins at the 32nd Dubrovnik Economics Conference on Sunday, with Waller framing them as a vehicle for US monetary influence and Greene predicting their imminent obsolescence.
Speaking at the annual Croatian National Bank event, Waller defended stablecoins as legitimate payment infrastructure. “I’ve always just looked at stablecoins as a payment instrument; there’s nothing evil about it, nothing dangerous about it. They are just bringing competition into the payments world,” Waller said. He argued that countries increasingly relying on dollar-backed stablecoins may effectively import US monetary conditions, expanding the reach of Federal Reserve policy beyond traditional banking channels.
Greene took the opposite view, predicting stablecoins will lose relevance within five years as tokenized deposits and central bank digital currencies capture market share. “I think tokenized deposits are probably going to take over from stablecoins and five years from now, I suspect we might wonder why we were talking about stablecoins,” she said during the panel discussion titled “Stablecoins and monetary policy.”
Greene sketched a three-way competition between payment systems. “I like to think of it as a massive race between the tortoise, the hare and the rhino. The tortoise is the central bank digital currency…the hare is stablecoins and the rhino is tokenized deposits. We’ll probably end up with all three, but if I had to put money in one…it would be the rhino, tokenised deposits, which I think will probably take off,” she said.
The officials also clashed on central bank digital currencies. Waller, a long-time CBDC skeptic, stated that enthusiasm for CBDCs has faded among many central banks. Greene disagreed, positioning CBDCs as part of the broader competition for payment dominance.
Their debate unfolds as Congress moves toward digital asset regulation. The CLARITY Act, which aims to establish a federal regulatory framework for digital assets, passed the Senate Banking Committee on May 15 after months of debate between banks and the crypto industry over stablecoin yield provisions. The bill must still pass both chambers before reaching the president’s desk.
Wyoming Senator Cynthia Lummis, a crypto advocate, warned that regulatory delays threaten US competitiveness. “America built the dollar-dominated financial system that has anchored global stability for a century. The Clarity Act ensures we build the next one. The time to act is now, before Beijing decides it will,” Lummis said, urging lawmakers to pass the legislation in 2026 to prevent other countries, including China, from gaining leadership in crypto.
