Christopher Waller is the Federal Reserve board governor. In a recent interview, he made it clear he’s not a fan of the digital currency space, nor does he think crypto assets have any real value to them.
Christopher Waller Is Concerned About Crypto
In the discussion, Waller said that most digital currencies were “speculative” and comparable to baseball cards. He also said that the only value they have stems from the belief of others. He stated:
If you buy crypto assets and the prices go to zero at some point, please don’t be surprised, and don’t expect taxpayers to socialize your losses.
Waller said he really doesn’t care if people want to engage in risky assets. However, what he does care about is whether they do so safely and quietly. He commented:
I’m supportive of prudent innovation in the financial system while at the same time concerned about banks engaging in activities that present a heightened risk of fraud and scams, legal uncertainties, and the prevalence of inaccurate and misleading financial disclosures.
He said that one of the big things that’s really bringing things down is the lack of regulation in the arena. He feels that if crypto exchanges and related businesses are to be taken seriously, they need to be forceful about KYC (know your customer) protocols and get all the information they can about their customers to ensure they are who they say they are. Otherwise, they’re running shady – and potentially criminal – enterprises.
He also commented on the record “spillover” that’s occurring from the crypto industry to the standard financial system. He mentioned that this is likely due to the “limited number of interconnections between the crypto ecosystem and the banking system.”
Waller is clearly taking a page from the Warren Buffett playbook. Buffett is the head of real estate giant Berkshire Hathaway, and he and his business partner Charlie Munger have made it clear over the years that they don’t think much of bitcoin or its digital counterparts. In fact, they hate them with a passion. Buffett has gone so far as to call bitcoin “rat poison squared” in the past.
So Much Trouble This Last Year
No doubt the crypto space has earned its fair share of haters in recent years given the volatility and price crashes traders have witnessed. BTC, for example, fell from its November 2021 all-time high of about $68,000 per unit and ultimately ended 2022 at $16,600, more than 70 percent less than where it was about a year prior.
Sadly, the trouble didn’t end there. Many additional crypto assets chose to follow in bitcoin’s footsteps and by the time the year was out, the cryptocurrency industry had lost more than $2 trillion in valuation in less than 12 months. It was a sad and very pathetic sight to see.
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