American Federal Reserve (Fed) Board Member Christopher J. Waller made evaluations about the impact of digital assets on the financial system. Waller stated that fluctuations in the Bitcoin and cryptocurrency markets do not pose a serious threat to the banking system. Waller, who was appointed to the Fed in 2020 and sits on the board where important decisions regarding monetary policy are taken, stands out as one of the names that closely follows the developments in the sector.
Cryptocurrency Ripple: “Part of the Game”
In his speech, Waller drew attention to the market movements of cryptocurrencies and pointed out that the price volatility experienced here is a basic feature of the sector. In his comment on this issue, he stated that harsh ups and downs in the crypto market are widely observed and that this is known as a concept specific to the sector.
It was evaluated that the rises and falls in the crypto world have now become common and these situations are a unique feature of the market.
The recent price declines in Bitcoin are less important when viewed in the long term. Waller said that eight years ago, it was considered unusual for Bitcoin to reach the level of 10 thousand dollars, and today the tendency to perceive it to fall to 63 thousand dollars as an extraordinary situation has become stronger.
Divergence Between Banking System and Crypto
The Fed manager shared his opinion that fluctuations or sharp depreciations in the cryptocurrency market do not directly affect traditional banking and payment systems. According to Waller, there is still a clear distinction between the digital asset market and the classical financial system.
It was emphasized that cryptocurrencies progress largely independently of the traditional financial world and that the shocks experienced in this market do not have a major spillover effect.
In addition, Waller stated that the cryptocurrency market is located far from the main systems under the daily monitoring of the central bank and that the normal operation of the banks is not affected by such market fluctuations and said, “Payments continue. Banks continue their normal working hours.” expressed his opinion.
Cryptoassets, New Technologies and the Need for Regulatory Clarity
In his speech, Waller pointed out that cryptocurrencies and blockchain technology are attracting the attention of more and more institutions and financial institutions. He stated that blockchain-based infrastructure enables faster and instantaneous transactions in the financial world, and that these technologies are especially used in international money transfers.
It was noted that financial institutions and public institutions are working on new systems that will enable uninterrupted transactions 24 hours a day, 7 days a week. Waller explained that the innovations this technology has brought to the sector have led banks to speed up their systems and reduce costs.
However, Waller pointed out that the regulatory framework for crypto assets and digital tokens should be clarified and stated that this task primarily belongs to the US Congress and relevant regulatory institutions. It was stated that no conclusion has yet been reached regarding whether digital assets should be classified as securities or commodities.
Waller emphasized that fluctuations in the crypto market are inevitable for investors and evaluated that those who do not take into account the risks of this field should not enter the market.
