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.

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.