Fed’s Waller Calls Crypto ‘Nothing More Than a Speculative Asset’
Federal Reserve Governor Christopher Waller said on Friday that he views crypto as a speculative asset worth whatever the next person is willing to pay for it, saying he personally wouldn’t want it.
“To me, a crypto asset is nothing more than a speculative asset, like a baseball card,” Waller said in a speech at a crypto conference at the Global Interdependence Center in La Jolla, California.
“If people want to hold an asset like that, then go for it,” Waller said. “I wouldn’t do that, but I don’t collect baseball cards either. But if you buy cryptoassets and the price goes to zero at some point, please don’t be surprised and don’t expect the taxpayers to socialize your losses.”
Waller said it is critical to ensure that the risks associated with crypto are mitigated, but that regulators should not “unduly constrain” the development and potential future use of any positive features of crypto.
Waller said that any bank that engages with crypto customers needs to be very clear about the customers’ business models, risk management systems and corporate governance structures to ensure that the bank is not left behind if a crypto meltdown occurs.
Waller’s comments come after the SEC on Thursday reached a settlement with crypto exchange Kraken over the staking program, which will see Kraken pay a $30 million fine and shut down its crypto staking service for US customers.
come after the Fed denied Wyoming-based crypto bank Custodia’s application to join the Fed’s system, noting that the bank’s focus on crypto created significant safety and soundness risks and therefore did not meet the requirements of the law.
The Fed also released a policy statement on crypto last month, which made it clear that uninsured and insured banks regulated by the Fed will be subject to the same limits on activities, including crypto.
Banks will be allowed to provide custodial services, custody, for cryptoassets if it is done in a manner that the Fed deems safe and sound and in compliance with consumer and anti-money laundering laws.
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