Cryptocurrencies will support a strong dollar... Are you serious?

One of the U.S. Federal Reserve Governors Christopher Waller said that the development of the crypto industry will contribute to the strengthening of the dollar.

This is perhaps the first statement by a high-level official claiming the use of cryptocurrency for the US financial system. 

Such a statement should still be interpreted. 

Is it to be understood that the Fed is ready to support the entire crypto industry?

Of course not!

It is unbelievable that Central Banks are willing to share part of the financial market with decentralized cryptos. It is also unlikely that the authorities will agree to take accounts from banks. Recall that to store cryptocurrency you do not need an intermediary in the form of a bank.

The American currency is expected to be saved by stablecoins. 90% of stablecoins are denominated in dollars. More recently, American authorities have warned of the risks to the financial system posed by stablecoins. The fears were justified because it looked like a hidden dollar issue, which was not controlled by the central bank. It could really be dangerous.

However, the rhetoric has now been reversed. What happened? 

First, the stablecoins are under control. Tether, the main player in the market, has announced full cooperation with the US government. This removes the issue of uncontrolled emissions.

Second, stablecoins provide authorities with an additional instrument of emissions, free from bureaucratic constraints. Printing dollars is a serious political problem. And it is not difficult to release a crypto through controlled crypto companies. The only condition is no decentralization!

No less interesting from the point of view of the financial authorities is CBDC (central bank digital currency). The main interest here is full transparency of all operations.

As for the other cryptos, it is expected to increase control.

Will such approaches succeed in strengthening the dollar? It is not obvious, however, time will tell.

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