Titled in text “Currency Ecosystem Considerations”, published this Friday (10), Christopher Waller criticized the industry. Comparing cryptocurrencies to baseball cards, the governor of the Federal Reserve declared that cryptocurrencies are nothing more than a speculative asset that can go to zero at any time.
He went further and also stated that people are free to invest in cryptocurrencies, but they should keep in mind that at some point they could go to zero. That is, investors must be prepared to lose everything.
Waller’s comments come as pundits accuse the US of “silently trying to ban cryptocurrencies”. According to Nic Carter, regulators have been vigorously and openly attacking the industry for at least two months.
Fed’s Christopher Waller sends message to cryptocurrency investors
In a note to be explored at a future conference, Christopher Waller provides an extensive reflection on cryptocurrencies and the industry behind them.
Referring to the FTX case, the Fed governor points out that at least 15 pension funds were affected by the bankruptcy.
“As losses pile up, the debate turns to whether there should be better investor protection”says Christopher Waller, governor of the Fed. “But even institutional investors, with significant resources to conduct investment due diligence, were feeling the pain of the so-called cryptocurrency winter.”
His criticism becomes even harsher when Waller compares cryptocurrencies to collectible figurines and celebrity autographs, items that have no intrinsic value yet trade for exorbitant sums.
“If people want to keep an asset like that, go for it. I wouldn’t, but I don’t collect baseball cards either. However, if you buy cryptocurrencies and the price reaches zero at some point, don’t be surprised and don’t expect taxpayers to socialize their losses.”
Finally, the Fed governor also mentions that between 12% and 20% of adult Americans have already come into contact with cryptocurrencies, a number that worries him.
Fed governor calls for more regulation, but also beware of non-regulators going too far
Finally, Waller also notes that the cryptocurrency contagion has had minimal impact on the traditional financial system. But even if he calls for more regulation, the Fed governor notes that it must be done carefully so as not to hinder the development of the sector.
While it is critical to ensure that the financial stability risks associated with cryptocurrencies are mitigated, it is important to distinguish the different parts of the crypto ecosystem in our minds as the debate over whether and how cryptocurrencies should be regulated, continues”concluded Christopher Waller. “This will ensure that we do not unduly restrict the development and possible future use of the positive features of the cryptocurrency ecosystem.”
That is, Waller believes that both blockchain technology and smart contracts have a great future, but he is skeptical about cryptocurrencies, especially in terms of value.
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Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
