Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of finance and cryptography.
Fed Governor Warns Crypto Prices Could Fall To Zero – Says ‘Don’t Expect Taxpayers To Socialize Your Losses’ – Markets & Prices Bitcoin News
US Federal Reserve Governor Christopher Waller has warned that crypto prices could fall to zero at some point. “Please don’t be surprised and don’t expect the taxpayers to socialize your losses” when that happens, the Fed governor stressed.
Crypto prices could go to zero, warns Fed official
Federal Reserve Governor Christopher J. Waller warned of the danger of investing in cryptocurrency Thursday at the Global Interdependence Center conference on “digital money, decentralized finance and the crypto puzzle.”
“To me, a crypto asset is nothing more than a speculative asset, like a baseball card. If people believe that others will buy it from them in the future at a positive price, then it will trade at a positive price today,” he described. “If not, the price will go to zero.”
He added: “If people want an asset like that, go for it. I wouldn’t do it, but I don’t collect baseball cards either.” However, the Fed governor warned:
If you buy crypto assets and the price goes to zero at some point, please don’t be surprised and don’t expect the taxpayers to socialize your losses.
“Several prominent crypto-related firms have filed for bankruptcy, including payment platforms, exchanges, crypto lenders and hedge funds,” Waller noted, adding that both retail and institutional investors have suffered during the crypto winter.
The Fed governor went on to express concerns about banks and other financial intermediaries engaging in crypto activities “which pose an increased risk of fraud and swindling, legal uncertainty and the proliferation of inaccurate and misleading financial disclosures.” He stressed that banks considering engaging in crypto activities must meet “know your customer” and “anti-money laundering” requirements.
Waller added:
So far, the ripple effects to other parts of the financial system from the stress in the crypto industry have been minimal.
The Fed official is also skeptical of central bank digital currencies (CBDC). Last October, he said he’s “not a big fan” of the Fed issuing the digital dollar, but that he’s open to having someone convince him that “this is something that’s really valuable.”
What do you think of Fed Governor Waller’s crypto statements? Let us know in the comments section below.
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