Federal Reserve Governor Christopher J. Waller played down risks from bitcoin and broader crypto markets on Monday, arguing that digital assets remain largely separate from the traditional financial system even as the technology behind them moves into the mainstream.
Speaking at an event hosted by the Global Interdependence Center, Waller framed crypto markets as an extension and competition of 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 recurring bouts of volatility that have shaped investor sentiment for years. While bitcoin has become more embedded in institutional portfolios, Waller suggested that price volatility remains part of the nature of the market rather than a systemic concern.
“Ups and downs in the crypto world have become so common that they actually have a name for them: winters,” he said. “It’s part of the game.”
Waller dismissed recent falls in bitcoin’s price as less dramatic when viewed through a longer lens, noting that levels once considered extraordinary are now treated as routine.
“People are like, oh my god, bitcoin is down to 63,000,” he said. “Eight years ago, if you just said it was 10,000, you would have said, oh my god, this is crazy.”
The Fed governor also pushed back against the idea that crypto volatility poses an immediate threat to banks or the broader payments system. In his view, crypto remains a separate ecosystem that can experience sharp crashes without triggering spillovers into traditional finance.
“These things are quite separate from the traditional world of finance,” he said. “You can have these big crashes and move volume. The rest of us wake up and we’re fine the next day. Nothing bad happens. Banks are open. Your payments are made.”
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 still outside the core of the financial system.
“The banks are open. Your payments are being made,” he said.
Early in 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, execution and record.
“In the decentralized crypto world, a crypto asset or digital asset is the object that people want to buy,” Waller said, pointing to bitcoin and other tokens. The transaction, he argued, relies on new technologies such as blockchains, tokenization and smart contracts, which he described as tools rather than threats.
“It’s just technologies,” Waller said. “There is nothing dangerous about them. There is nothing to be afraid of.”
Waller: Bitcoin and crypto are becoming more mainstream
At the same time, Waller acknowledged that crypto markets have begun to intersect more with mainstream finance, especially as traditional firms explore blockchain-based infrastructure. He pointed to efforts by financial institutions and even the US Treasury Department to consider tokenized securities trading that could operate around the clock.
The ability to support 24/7 global trading, he said, represents one of the key innovations in blockchain-based systems compared to legacy banking infrastructure built around business hours and slower clearing cycles.
“These technologies were built to do this globally, 24 times seven from the beginning,” Waller said. “They are not old systems.”
He argued that this constant trading and settlement capability is already forcing traditional financial institutions to improve their own payment systems, especially in cross-border transfers, where cryptos can move value without relying on established networks.
“They’re forcing the big banks, everybody else, to kind of make their payments, especially cross-border, faster and cheaper,” he said.
Waller also highlighted the need for clearer regulatory definitions around digital assets, including whether different tokens should be treated as securities or commodities. He said the responsibility lies with Congress, the Securities and Exchange Commission and the Commodity Futures Trading Commission.
“The biggest issue is clarity,” Waller said, adding that progress in Congress appears to be stalling. “Everybody thought there would be clarity that would clear the way,” 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 fading expectations that comprehensive legislation would come quickly.
“The lack of passage of the Clarity Act has kind of put people off,” he said.
While Waller emphasized that bitcoin and speculative cryptoassets are not his focus as a central banker, he offered direct advice to investors navigating the sector’s volatility.
“Prices are going up. Prices are going down,” he said. “If you don’t like it, don’t come in.”