Fed Governor Champions DeFi, Stablecoins, and RWA Tokenization in Landmark Pro-Crypto Address
Federal Reserve official drops crypto bombshell—endorses decentralized finance as the future.
DeFi's Disruption Play
The governor praised DeFi's potential to slash settlement times from days to seconds, bypassing traditional banking bottlenecks. No more waiting for wires to clear—just instant, transparent transactions.
Stablecoins Steal the Spotlight
Stablecoins got branded as 'critical infrastructure' for modern finance—not just speculative toys. They’re bridging crypto and fiat, smoothing volatility without the usual Wall Street markup.
Real-World Assets Go Digital
Tokenization of real-world assets—think property, commodities, even royalties—unlocks liquidity trapped in illiquid markets. Because why let a $20 million building sit idle when it could be fractionalized and traded 24/7?
One cynical finance jab: TradFi banks are sweating—their 3% fees can’t compete with code that runs for pennies.
Bottom line: The Fed isn’t just watching—it’s leaning in. Crypto’s not knocking on finance’s door anymore. It’s kicking it down.
Nothing Scary About DeFi
Waller emphasized that blockchain technology complements rather than replaces traditional payment systems, noting many stablecoin operations still rely on legacy payment services.
JUST IN: Fed Governor Christopher Waller calls for the U.S. to embrace AI and stablecoins to modernize its payment systems – aiming for faster, cheaper, and more secure transactions.
He stresses that regulators must adapt or risk falling behind.
FOMO IS HERE pic.twitter.com/Wy3wfayOif
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He explained how traditional payment transactions with something being bought and paid for, and technology facilitating the transaction and issuing a receipt. “The same process applies to the crypto world,” he said before adding:
“There is nothing scary about this, just because it occurs in the decentralized finance or DeFi world — this is simply new technology to transfer objects and record transactions.”
Waller added that there was also nothing to be afraid of when thinking about using smart contracts, tokenization, or distributed ledgers in everyday transactions.
The central banker echoed the SEC Chair’s recent comments praising the recently signed GENIUS stablecoin bill, calling it an important step that could help stablecoins reach their full potential.
“This was an important step for the payment stablecoin market and could help stablecoins reach their full potential.”
The speech also revealed the Fed is actively conducting technical research on real-world asset tokenization, smart contracts, and AI to understand trends and support private firms using banking infrastructure.
“It is my belief that the Federal Reserve could benefit from further engagement with innovators in industry, particularly as there is increased convergence between the traditional financial sector and the digital asset ecosystem.”
Christopher Waller’s comments reflect the central bank’s partial pivot toward embracing crypto, following April’s withdrawal of 2022 guidance that deterred banks from crypto activities.
Stablecoin Ecosystem Outlook
The stablecoin market is currently valued at around $280 billion, which represents around 7% of the total crypto market capitalization.
Tether still commands the lion’s share of that market with 60% and a record $167 billion USDT in circulation.
Circle remains second with 24% market share and $67.5 billion USDC in circulation, and Ethens USDe has flipped Maker’s USDS for third place with a 4% market share.
There have been a lot of new entrants to the crowded stable market recently, including Ripple (RLUSD) and World Liberty Finance (USD1), but these are minnows compared to the market leaders.
