Crypto Assets Are Purely Speculative, Claims Member of FED’s Board of Governors
Christopher J. Waller is a member of the Federal Reserve's Board of Governors, a high-ranking position in the US central bank. Recently, he shared his views on crypto assets in a speech.
Views on crypto assets
Waller believes that the value of crypto assets is driven purely by belief and has no intrinsic value.
He compares them to baseball cards, which also have no intrinsic value and depend on the buyer’s belief that others will purchase them in the future.
However, Waller recognizes the potential of the technologies related to crypto assets, such as smart contracts and tokenization, to lead to productivity enhancements in industries outside of the crypto world. He notes that tokenization could be used to facilitate the of trade objects while preserving identity protection.
While Waller is not opposed to individuals making risky investments in crypto, he believes banks must operate to a higher standard.
He supports innovation in the financial system but is also concerned about the potential for fraud, scams, legal uncertainties, and false financial disclosures.
Waller emphasizes the importance of banks being clear about the customer’s business models, risk management systems, and governance structures to ensure that they are kept from holding the bag in case of a crypto meltdown.
In conclusion, Waller views crypto assets as speculative assets with no intrinsic value and highlights the importance of risk management in the crypto industry. He recognizes the potential of technology related to crypto assets. Waller also warns of the potential dangers and uncertainties in the sector.