Fed Governor "Christopher Waller" Prefers to keep Crypto Apart From Banks

In a recent statement, Christopher Waller, a Federal Reserve Board governor, stated that parts of the cryptocurrency industry should be encouraged to thrive as long as they do not pose a threat to the US banking system. He expressed optimism that the young industry will eventually work out its problems, despite recent firm failures like the FTX collapse. He noted that the fallout from these failures has not caused significant damage to the financial system, in part due to the limited interconnections between the crypto ecosystem and the banking system.

Waller supports prudent innovation in the financial system but is also concerned about the risks associated with banks engaging in activities related to crypto, such as fraud and scams, legal uncertainties, and misleading financial disclosures. He believes that a bank that wants to be involved in crypto should be transparent about its customers' business models, risk-management systems, and corporate governance structures to ensure that it is not exposed to risks in the event of a crypto meltdown.

Waller is optimistic that the digital assets industry will mature and work out its governance, risk management, and transparency issues. He expects that once this happens, there will be more opportunities to integrate crypto into the traditional financial sector.

However, Waller is not personally interested in holding crypto assets, which he considers to be speculative assets like baseball cards. He also does not see a convincing case for a central bank digital currency (CBDC), as he does not believe there is a unique problem that a digital dollar would solve. Waller does not believe it is the role of the seven unelected Fed governors to decide on a CBDC and is waiting for direction from Congress.