Federal Reserve Governor Claims Crypto Holds No Threat

Federal Reserve Governor Christopher Waller mentioned that using cryptocurrencies for regular payments should feel just as simple as swiping a debit card, as he stated on Tuesday.

“There’s nothing to fear when considering the use of smart contracts, tokenization, or distributed ledgers for daily transactions,” he expressed during his speech at the Wyoming Blockchain Symposium in Teton Village, Wyoming. “This represents merely new technology.”

Waller characterized stablecoins as a progression in payment systems, referencing earlier physical cards that did not have magnetic strips or chips. He recognized that while stablecoins have evolved from their initial purpose, they “hold the potential to enhance retail and cross-border transactions,” further simplifying global access to the U.S. dollar.

“As the stablecoin landscape developed, companies discovered that the qualities of these coins using distributed ledger technology—such as round-the-clock availability, rapid transfer capabilities, and their universally circulating nature—could also be beneficial for other applications,” he remarked.

Waller, appointed during U.S. President Donald Trump’s initial term, indicated The Wall Street Journal last month that he would accept a position as Fed Chair if asked. He also disagreed with the central bank’s decision to maintain steady rates in July for a fifth consecutive meeting, advocating for a quarter-percentage-point rate reduction along with Governor Michelle Bowman.

On Tuesday, Bowman also spoke at the Wyoming symposium, stating “one does not need a technological background to see the advantages that blockchain offers to the financial system.”

Waller acknowledged on Wednesday that some have “exhibited fear or skepticism regarding innovations” in the payment arena, but he emphasized that “there is nothing intimidating” about crypto transactions simply because they occur in the decentralized finance environment.

The enactment of the GENIUS Act established a federal structure for stablecoin issuers, and Waller asserted that this could empower dollar-pegged tokens to “achieve their full potential” within the U.S.

While his statements primarily addressed private-sector advancements, Waller’s comments followed the launch of Wyoming’s stablecoin earlier this week. The revenue generated from the token’s reserves is likely to benefit the state’s school foundation fund.

The Fed has historically contributed to advancements in payment technologies by offering clearing and settlement infrastructure for financial institutions. Waller highlighted that this support has been a part of the central bank’s mission since its inception.

As stablecoins become more integrated into the financial landscape, Waller stated that the Fed is researching tokenization, smart contracts, and artificial intelligence in payments. He refrained from specifically mentioning Central Bank Digital Currencies despite some conservative warnings about the risks associated with a Fed-issued dollar-pegged token.

“Understanding evolving trends in payments technology is crucial, enabling us to continue supporting private sector entities that utilize our infrastructure, and identifying if new technologies could provide opportunities to enhance our current systems and services,” he concluded.