Fed governor tells bankers DeFi is ‘nothing to be afraid of’

Waller’s comments reflected the Fed’s steady pivot toward embracing crypto and its future role in the US payments system. In April, it withdrew guidance from 2022 that served to deter banks from engaging in crypto and stablecoin activities.

Last week, the Fed ended its risk-focused “novel activities supervision program” overseeing crypto-related activities, while Fed Vice Chair for Supervision Michelle Bowman on Tuesday suggested staff should be allowed to hold small amounts of crypto to better understand the technology.

Waller’s pro-crypto views could soon have more weight, as he is considered a front-runner to replace Jerome Powell as Fed chair. Powell’s term ends in May 2026 and can only be extended if he is renominated by President Donald Trump and confirmed by the Senate. However, Trump has reportedly been pressuring Powell to resign.

Buying memecoins with crypto like buying apples with fiat: Waller

Waller said DeFi transactions follow the same logic as everyday debit card purchases, comparing the use of stablecoins to buy a memecoin to tapping a debit card at a grocery store to pay for an apple.

“I can go to the grocery store and buy an apple and use a digital dollar in my checking account to pay for it. I tap my debit card on a card reader to conduct the transaction. Finally, the machine prints out a receipt, which is the record of the transaction. The same process applies to the crypto world.”

“I buy a meme coin and use a stablecoin as the means of payment. The transaction takes place using a smart contract. Finally, the transaction is recorded on a distributed ledger.”

GENIUS bill an “important step” for stablecoin adoption

The recent signing of the Guiding and Establishing National Innovation for US Stablecoins Act marked an “important step” for stablecoin adoption, Waller said, adding that it could help stablecoins “reach their full potential.”

Related: US Treasury calls for public comment on GENIUS stablecoin bill

He noted that stablecoins could help maintain and expand the dollar’s role internationally — especially in high-inflation countries or those with limited access to physical dollars — while improving retail and cross-border payments.

Stablecoin market tipped to increase 615% by 2028

The stablecoin market currently sits at $280 billion, a market the US Treasury estimated in April would reach $2 trillion by 2028.

The department supported its projection by noting that a stablecoin regulatory framework could rapidly accelerate demand for US Treasury bills.