Fed Governor Waller: Reiterates DeFi-friendly stance, advocates private sector-led payment innovation

Federal Reserve Governor Christopher Waller reaffirmed his friendly stance on DeFi (decentralized finance) at the Wyoming Blockchain Symposium, emphasizing that it should not be regarded as a threat simply because it operates outside the traditional banking system. He believes that DeFi is a "natural technological evolution" of the payment system, which can complement rather than completely replace traditional finance.

Waller analogized DeFi operations to daily shopping, pointing out that using stablecoins for cryptocurrency transactions is similar to the process of shopping with a debit card, and emphasizing that smart contracts and distributed ledger technology are not terrifying.

He advocated that the private sector should take the lead in payment innovation, and stablecoins are an important market-driven case that can expand the global use of the US dollar, especially in countries with high inflation and insufficient financial services.

Stablecoins have the advantages of 24-hour service and fast money transfer, which help maintain and expand the international status of the US dollar and improve the efficiency of retail and cross-border payments.

Waller expressed support for the newly passed *GENIUS Act*, calling it an important step in the development of the payment stablecoin market.

He also mentioned that the Federal Reserve is studying tokenization, smart contracts, and artificial intelligence technologies to perform its duties in the payment system and provide infrastructure support for private enterprises.

Waller believes that driven by technological progress, the payment system is undergoing a "technology-driven revolution," and the private sector can more effectively meet consumer needs through competition and innovation.

Summary

Federal Reserve Governor Christopher Waller stated that DeFi should not be considered "scary" just because it operates outside traditional banking infrastructure.

At the 2025 Wyoming Blockchain Symposium, Waller defined blockchain-based transactions as a "natural technological evolution" rather than a "disruptive threat."

He drew an analogy between DeFi operations and traditional shopping, pointing out that "using stablecoins to buy cryptocurrencies through smart contracts" is completely consistent with the basic process of "shopping with a debit card at a grocery store."

Waller said, "There is nothing to fear about using smart contracts, tokenization, or distributed ledgers in daily transactions."

The Fed governor positioned DeFi technology as a "new tool for transferring assets and recording transactions" and emphasized that its functions are highly similar to existing payment methods.

Waller advocated that innovation led by the private sector should be the core driving force for the development of the payment system, and regarded stablecoins as "the latest example of market-driven solutions."

In addition, he believes that the development of stablecoins has expanded the global use of the US dollar, especially in countries with high inflation and a lack of inclusive financial services.

Waller even emphasized that stablecoins, with the characteristics of "24-hour uninterrupted service" and "fast money transfer," are not only expected to "maintain and expand the international status of the US dollar" but also improve the efficiency of retail and cross-border payments.

The speech came after the passage of the *GENIUS Act*, the first core cryptocurrency legislation signed into law in the United States, which Waller called "an important step for the payment stablecoin market."

Waller's statement in Wyoming is a continuation of his "pro-innovation" stance throughout 2024.

In October last year, at the Vienna Macroeconomics Symposium, Waller pointed out that DeFi is more likely to "complement traditional finance" rather than "completely replace traditional finance."

He acknowledged the potential of DeFi in "simplifying financial activities" and emphasized that financial intermediaries still play an important role for most people.

In November 2024, at the annual meeting of the Clearing House, Waller advocated for market-driven solutions in the field of cryptocurrencies and payments, and emphasized the advantages of the private sector in promoting innovation through competition.

He believes that profit motives and market competition can enable private enterprises to make better choices in technology investment decisions and consumer demand evaluation.

Waller also mentioned that the Federal Reserve is conducting technical research on tokenization, smart contracts, and artificial intelligence in the payment field. This initiative not only helps the Federal Reserve perform its duties as an operator of the payment system but also provides space for private enterprises to utilize central bank infrastructure.

Waller said that driven by advances in computing power, data processing, and distributed networks, the payment system is undergoing a "technology-driven revolution."

Disclaimer: The views in this article only represent the author's personal opinions and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness, originality, or timeliness of the information in the article, nor does it assume responsibility for any losses caused by the use of or reliance on the information in the article.