Fed Governor Waller: Tokenization is Becoming a New Channel for Dollar Circulation

On June 23, Federal Reserve Governor Christopher Waller stated at the opening of the Federal Reserve's Fifth Conference on the International Role of the Dollar that the purpose of the conference is to gather various perspectives to explore the forces shaping the global status of the dollar. Waller noted, 'This year, we will focus on financial innovation, particularly the impact of digital assets such as stablecoins on the international role of the dollar.' He emphasized that the dollar's core position in the global financial system still relies on several traditional advantages, including the size and strength of the U.S. economy, deep and liquid financial markets, and trust in U.S. institutions and the rule of law. At the same time, Waller highlighted that the financial environment surrounding these advantages is rapidly changing. With the development of distributed ledger technology (DLT) and tokenized assets, new channels for dollar intermediation are emerging, which may operate independently of traditional banking and payment systems or in conjunction with them. Waller stated, 'Therefore, the international role of the dollar is also continuously evolving. The private sector is rapidly expanding access to dollar-denominated assets, innovating new financial services, and exploring business opportunities that may not be feasible under traditional technological conditions.'