By The Daily Hodl - 1 year ago - Reading Time: 2 minutes
Crypto-Skeptic U.S. Federal Reserve Governor Talks Up Potential Benefits of Blockchain and Tokenization
A high-ranking crypto-skeptic at the U.S. Federal Reserve has acknowledged that blockchain and tokenization could have an innovative impact on the future of finance.
Christopher J. Waller, one of the seven members of the Fed’s Board of Governors, says in a new speech that smart contracts and tokenization carry inherent risks, but also have “considerable promise” in terms of their potential to make the financial sector more efficient.
The Fed governor notes that private sector firms have executive foreign-exchange trades via the blockchain.
“Separately, financial institutions have used blockchain to facilitate intraday repo transactions. Parties to these transactions may have more flexibility as to when the transactions settle, which in turn has the potential to create additional capital and liquidity efficiency.
And blockchain’s atomic settlement functionality may serve as another way to achieve an important risk mitigant: using repurchase agreements as an example, the repo ‘seller’ can have confidence that it will receive the specified loan amount in exchange for the collateral it conveys; while the repo ‘buyer’ knows it will receive the specified collateral.
These efforts are still in early stages, but I expect that as functionality expands with more currencies, eligible securities, and new products, there will be more participation and growth.”
Waller argued in a separate speech in February that digital assets are like baseball cards and have no intrinsic value.
“To me, a crypto-asset is nothing more than a speculative asset, like a baseball card. If people believe others will buy it from them in the future at a positive price, then it will trade at a positive price today. If not, its price will go to zero.
If people want to hold such an asset, then go for it. I wouldn’t do it, but I don’t collect baseball cards, either. However, if you buy crypto assets and the price goes to zero at some point, please don’t be surprised and don’t expect taxpayers to socialize your losses.”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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Original source: The Daily Hodl