Crypto : A Fed governor shocks with a statement on stablecoins

The rise of stablecoins, these cryptos backed by stable assets like the dollar, could well change the game for the global financial system. While the debate over their regulation rages on, an influential voice has just taken a stand. Christopher Waller, governor of the U.S. Federal Reserve, stated that, under certain conditions, these digital assets could benefit the traditional financial system. His remarks, delivered at a conference at the Institute of Advanced Studies on October 18, shed more light on how stablecoins could transform the way payments are made globally.

Stablecoins : a new asset for international payments

During his speech, Christopher Waller emphasized that stablecoins, if properly regulated, could reduce costs related to cross-border payments by eliminating the need for financial intermediaries. Indeed, “stablecoins can reduce the need to rely on payment intermediaries and thus lower global transaction costs,” he stated. These cryptos, often backed by fiat currencies like the U.S. dollar, offer the possibility of making transactions smoother and speeding up payment times, especially in areas where banking infrastructure is less developed.

Waller also mentioned that stablecoins, if properly regulated, could become a key pillar of new trading platforms. “If appropriate safeguards can be put in place to minimize panic risks and limit other dangers, such as their use in illicit activities, then stablecoins could play a beneficial role in payments and serve as safe assets,” he specified. The Fed governor insists on the importance of clear and robust regulation to allow stablecoins to thrive without compromising the stability of the financial system.

Stablecoins : potential to be managed with caution

However, despite these apparent advantages, Waller did not fail to recall that the security of stablecoins was by no means guaranteed. He expressed reservations about their large-scale use without strict regulation to manage associated risks. “The security of stablecoins is not assured,” he warned. Furthermore, he points out the dangers related to the absence of a regulatory framework. Without adequate safeguards, these assets could be used for illicit purposes or trigger liquidity crises in the event of massive losses of confidence, known as a “bank run.”

Waller also echoed the concerns of several U.S. lawmakers regarding growing competition between offshore stablecoins and those regulated in the United States. According to a new report from Chainalysis, stablecoin transactions on platforms not regulated by the United States reached 60 % of global volume in 2024, a figure that reflects the trend toward the adoption of these assets outside the U.S. legal framework. Thus, if this trend continues, stablecoins could escape regulators’ control, making their management even more complex. This situation could reinforce calls for more coherent and harmonized international regulation to prevent these assets from becoming a threat to global financial stability.

As stablecoins continue to establish themselves as an alternative to traditional payments, their integration into the global financial system will heavily depend on the ability of regulators to establish a secure framework. While Christopher Waller and other influential voices acknowledge their potential, the need for strict regulation remains at the heart of the debate. The prospects for the future will therefore depend on legislators, but also on the ability of the financial sector to adapt to the new dynamics imposed by these cryptos. Stablecoins: opportunity or threat? Only effective regulation will settle this question.