- Fed Governor Christopher Waller said that crypto assets are very speculative.
- If an asset drops to zero, it’s on investors, who should not hope to be compensated by taxpayers.
Everyone has different views about cryptocurrency; some consider it good, some bad. Christopher Waller, Federal Reserve Governor, spoke out his views on crypto, saying, “To me, a crypto-asset is nothing more than a speculative asset, like a baseball card.”
In a speech during a crypto conference held at Global Interdependence Center in La Jolla, California, Waller shared his views, arguing that crypto is a speculative asset, with a value of whatever the next person is willing to pay, and that’s ludicrous. Further saying that he will never hold any of it.
After comparing the crypto assets with baseball cards, he said that if anyone wishes to own them, they are free, but he would never do it, also saying that he doesn’t collect baseball cards either. Further, when a high-value crypto asset suddenly plummets to zero, it should not surprise the investors; furthermore, they must not expect that taxpayers might compensate for their losses.
It’s of paramount importance to assuage the risks associated with crypto, further adding that the regulator should try not to inordinately limit the development and possible future uses of the best features and technologies of the crypto industry.
Also, the banks that are either already or willing to engage with crypto customers must be clear with the customers’ business models, corporate governance structure, and risk management system, ensuring that the bank would not have to face the consequences in the event of a meltdown.
As far as the Central Bank Digital Currency (CBDCs) are concerned, Waller said that the glaring question here is what failure or fault of the current United States payment system exists and can only be solved through CBDC. Further adding to the speech, he said:
“It (CBDC) could be valuable in some countries it’s valuable. Bit for the U.S., I just don’t see the value proposition for us.”
On Thursday, the financial watchdog of the United States, the Securities and Exchange Commission (SEC), fined crypto exchange Kraken for their staking problems. Where the exchange alleged that their crypto staking services were against US laws, now they have reached a settlement of $30 million with the SEC, and they would also shut the operations in the US.
Fed also denied a Wyoming-based crypto bank called Custodia’s application for becoming a member of the Fed’s system. Arguing that the bank’s focus on crypto could create considerable safety and soundness risks, thereby failing to meet the requirements as per law.
They recently issued a policy statement on crypto, clearing all banks that are uninsured or insured; all banks regulated by Fed are subjected to similar limitations. They cannot hold crypto assets or issue stablecoins. Also, they have expanded their authority to cover non-FDIC-insured banks.
However, the banks would be allowed to provide safekeeping services or custody of crypto assets provided it is done in a Fed-approved way. The way is safe, sound, and 100% compliant with consumers and anti-money laundering laws.
Source: https://www.thecoinrepublic.com/2023/02/11/fed-governor-waller-compares-crypto-assets-to-baseball-cards/