Fed Governor Waller: Crypto Now Woven Into the Financial System

HKAN | Oct 22

At the inaugural “Payments Innovation Conference” held by the Federal Reserve Board, Governor Christopher J. Waller delivered remarks underscoring that crypto-assets and distributed ledgers have moved beyond the fringes and are now fundamentally integrated into the nation’s financial infrastructure. He stated that stablecoins, tokenised assets and blockchain-based innovations are no longer isolated experiments but active components of the payment and settlement ecosystem.

Key take-aways

• Waller affirmed that the Fed is entering a new era in payments—one in which the DeFi (decentralised finance) industry is no longer viewed with suspicion, but welcomed into dialogue and development.

• He described the shift by saying: “This is an acknowledgement that distributed ledgers and crypto-assets are no longer on the fringes but increasingly are woven into the fabric of the payment and financial systems.”

• Waller signalled that the Fed intends to be an active participant in innovation — not simply a regulator reacting to disruption.

• He proposed the exploration of a new type of access for payments innovators: a “skinny” or “payment” account that would allow legally eligible firms more direct access to the Fed’s payment rails, tailored for lower-risk entities in the fintech and crypto space.

What it means

• Recognition of crypto’s role: The Fed’s language signals official recognition that Bitcoin, cryptocurrencies and tokenised assets are not niche phenomena but are becoming structural parts of the financial system.

• Potential infrastructure change: By proposing a lighter form of access to Fed payment systems, Waller is hinting at potential shifts in how fintechs, crypto-native firms and innovators interact with central-bank infrastructure.

• Regulation meets innovation: While acknowledging innovation, the Fed emphasises that safety, stability and oversight remain core. The integration of new technologies must still preserve the integrity of payment and financial systems.

• Implications for institutions & investors: Traditional financial institutions, fintech firms and crypto-native companies alike may increasingly see their operations framed within mainstream payment infrastructure rather than as separate silos.

What’s next

• The Fed will engage with stakeholders to refine the “payment account” concept — establishing how such accounts would work, eligibility criteria, risk controls and the balance between innovation and supervision.

• Expect further commentary and perhaps policy proposals around tokenised assets, smart contracts and stablecoins—areas Waller flagged as part of the frontier of payments innovation.

• For the crypto industry, this signals a moment of transition: as regulatory and infrastructure frameworks evolve, firms may shift from purely speculative models toward more integrated financial-services offerings.