Federal Reserve Governor Christopher J. Waller downplayed the risks posed by bitcoin and the broader crypto market on Monday, arguing that digital assets remain disconnected from the traditional financial system even as the technology behind them enters the mainstream.
Speaking at an event hosted by the Global Interdependence Center, Waller framed crypto markets as an extension and competition to day-to-day trading rather than an entirely new phenomenon.
His comments come as crypto markets continue to grapple with regulatory uncertainty in Washington and volatile conditions that have shaped investor sentiment for years. Although bitcoin has become a major focus of institutional portfolios, Waller suggested that price swings are always a part of the market rather than a systemic concern.
“The ups and downs in the crypto world have become so common that they have their own name: winter,” he said. “It’s part of the game.”
Waller dismissed the recent decline in the price of bitcoin as not too shocking from a long-term perspective, noting that levels that were once considered abnormal are now considered normal.
“People are like, oh my god, bitcoin is down to 63,000,” he said. “Eight years ago, if you had just said it was 10,000 you would have said, oh my god, this is crazy.”
The Fed governor also pushed back on the idea that crypto volatility poses immediate threats to banks or the broader payments system. In his view, crypto remains a unique ecosystem that can experience a sharp crash without causing traditional financial spillovers.
“These things are very different from the traditional financial world,” he said. “You can have these big events and shake the volume, we all wake up and go well the next day, nothing bad happens, the banks are open, you pay.
Waller said he does not closely monitor crypto markets as part of his day-to-day responsibilities at the central bank, describing the sector as outside the core of the financial system.
“Banks are open. Your payments are being paid,” he said.
At the beginning of his talk, Waller compared a typical blockchain transaction to buying an apple at the grocery store, with different items and different rails but the same basic structure of payment, processing, and record keeping.
“In the crypto world, a crypto asset, or a digital asset, is something that people want to buy,” Waller said, pointing to bitcoin and other tokens. Transactions, he said, depend on new technologies such as blockchains, tokens, and smart contracts, which he described as tools rather than threats.
“That’s just technology,” Waller said. “There is nothing dangerous about them. There is nothing to fear.”
Waller: Bitcoin and crypto have become mainstream
At the same time, Waller acknowledged that crypto markets have begun to diverge more from mainstream currencies, especially as traditional firms explore blockchain-based infrastructure. He referred to efforts by financial institutions and even the US Treasury to consider trading in tokenized securities that could operate around the clock.
The ability to support 24/7 global transactions, he said, represents one of the main innovations of blockchain-based systems compared to legacy banking infrastructure built around business hours and slow clearing cycles.
“This technology is designed to do this globally, 24 by seven from the start,” said Waller. “They are not inheritance plans.”
He pointed out that this continued ability to trade and settle is already forcing traditional financial institutions to improve their payment systems, especially in cross-border transfers where crypto rails can transfer value without relying on established networks.
“They are forcing the big banks, everyone, to make their payments, especially cross-border, faster and cheaper,” he said.
Waller also highlighted the need for clear regulatory definitions regarding digital assets, including whether various tokens should be considered securities or assets. He said that task rests with Congress, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
“The biggest problem is clarity,” Waller said, adding that progress in Congress appears to have stalled. “Everyone thought that there would be a clearing house that would clear the road,” he said. “It doesn’t look like it’s going anywhere anytime soon.”
Waller suggested that some of the recent cooling in crypto market enthusiasm reflects dim expectations that sweeping legislation will come soon.
“The non-passing of a clarifying act made people careless,” he said.
While Waller stressed that bitcoin and speculative crypto assets are not his focus as a central banker, he offered some vague advice for investors navigating the sector’s volatility.
“Prices go up. Prices go down,” he said. “If you don’t like it, don’t come in.”
