Federal Reserve Governor Declares Crypto and Banks Can Coexist—Here’s Why It Matters

Fed official drops bombshell: digital assets don't threaten traditional banking—they complement it.

The Regulatory Shift

No more 'us versus them' rhetoric. The Fed's latest stance signals a seismic policy pivot—one that acknowledges crypto's role in modern finance without dismantling the existing system. Banks get to keep their vaults; crypto gets its decentralized playground.

Wall Street's Worst Nightmare—Or Best Frenemy?

Traditional institutions once feared crypto would render them obsolete. Now? They're exploring integration—think blockchain settlements, tokenized assets, and yes, even digital dollar pilots. Because nothing sparks innovation like existential dread—and potential profit.

Finance's Ironic Twist

Bankers who once mocked Bitcoin now hire blockchain devs. The same system that called crypto a 'fraud' is quietly filing patents. Classic finance move: if you can't beat 'em, absorb 'em—and charge a management fee.

Fed Eases Its Stance On Crypto

Waller urged policymakers and private banks to work more closely on payment infrastructure that includes digital assets. He explained that tools like smart contracts, tokenization, and distributed ledgers are simply new ways of recording and processing transactions.

His comments come after a series of changes inside the Fed. In April, the central bank withdrew 2022 guidance that discouraged banks from engaging in crypto and stablecoin activities.

Christopher Waller Member of the Federal Reserve Board of Governors of the United States says that distributed ledger is a technology. According to him the Fed is looking how they can use smart contracts in the payment system in the United States. The signal is super strong that… pic.twitter.com/Jm9XKHe0jc

— Sergii Gerasymovych (@SergiiGera) August 20, 2025

Last week, it also ended its “novel activities supervision program,” which had been monitoring crypto-related activity with extra scrutiny. Fed Vice Chair for Supervision Michelle Bowman went even further, saying staff should be allowed to hold small amounts of crypto to better understand the technology they regulate.

Waller, who is being mentioned as a possible successor to Jerome Powell when his term as chair ends in May 2026, could see his influence grow.

Reports have said US President Donald TRUMP has pressured Powell to resign, adding weight to speculation about Waller’s role in shaping the Fed’s future position on digital assets.

Comparing Crypto To Everyday Purchases

In his speech, Waller drew a comparison between paying for groceries with a debit card and using stablecoins to buy tokens in the crypto space. He described both as transactions that follow the same logic—using money to purchase something, confirming it through a system, and recording it on a ledger.

“I can go to the grocery store and buy an Apple with a debit card,” Waller said. “In the same way, I can use a stablecoin to purchase a meme coin, and the process is no different when you look at the mechanics behind it.”

By simplifying the idea, Waller sought to reduce fear that still lingers in the banking industry over crypto payments and highlight how the technology mirrors what consumers already do every day.

Waller also welcomed the recent passage of the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), calling it an important MOVE for wider adoption.

He suggested that stablecoins could strengthen the dollar’s global standing, especially in countries facing high inflation or limited access to physical dollars.

Featured image from Unsplash, chart from TradingView