At the Global Interdependence Center Conference on "Digital Money, Decentralized Finance, and the Puzzle of Crypto" on Thursday, Federal Reserve Governor Christopher J. Waller warned of the dangers associated with investing in cryptocurrencies.
“Please don’t be surprised and don’t expect taxpayers to socialize your losses when that happens,” he stressed. “To me, a crypto asset is nothing more than a speculative asset, like a baseball card. If people believe others will buy it from them in the future at a positive price, then it will trade at a positive price today. If not, its price will go to zero.”
Waller later added that both retail and institutional investors have been affected, saying that “several prominent crypto-related firms have filed for bankruptcy, including payment platforms, exchanges, crypto lenders, and hedge funds.”
Banks and other financial intermediaries engaged in crypto activities, according to the Fed governor, present an increased risk of fraud and scams, legal uncertainty, and inaccurate and misleading financial disclosures, among other factors.
Additionally, Fed officials are skeptical about central bank digital currencies (CBDCs). In October of last year, Waller also stated that he was "not a huge fan" of the Fed issuing the digital dollar, but he was open to being convinced that it was a valuable development.