Christopher J Waller: Risk in the crypto markets

Speech by Mr Christopher J Waller, Member of the Board of Governors of the Federal Reserve System, at the Swiss National Bank SNB-CIF Conference on Cryptoassets and Financial Innovation, Zurich, 3 June 2022. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
08 June 2022

Thank you for the chance to be part of this interesting discussion. It's a pleasure to speak with such a good mix of academic, industry, and official-sector experts about a topic with real importance to the future of the financial system. I know my remarks are coming after a long day, and I plan to keep them short. My goal tonight is not to weigh in on whether and how crypto-asset markets should be regulated. Instead, I want to make some observations that I hope will help focus discussion of that question in the right place. The main issue in crypto-asset regulation isn't how to protect sophisticated crypto-investors; it's how to protect the rest of us.

By any measure, the last five years have been a stretch of incredible growth in crypto-asset markets. Every aspect of them has expanded, from protocols and platforms, to instruments and intermediaries. Public awareness and government attention have increased. Above all, crypto itself has evolved from a limited set of coins meant to provide an alternative means of payment to decentralized finance, or "DeFi," arrangements, meant to provide alternatives to a range of financial products and services. Innovation is happening fast, and many of the people and groups represented in this room have found new uses in finance for this technology.