• Federal Reserve Board Governor Christopher Waller noted that U.S. financial system has been kept out of the crypto’s drama due to the separation of crypto from banks.
• Waller is hopeful that the sector can work out its recent issues, such as the FTX collapse and other firm failures, without causing significant damage to the U.S. banking system.
• He believes that if banks are to be involved in crypto, they must have clear business models, risk-management systems and corporate governance structures in order to protect themselves from potential failure.

U.S Regulators Prefer Keeping Crypto Apart From Banks

Federal Reserve Board Governor Christopher Waller noted that the separation between crypto and banks has kept U.S financial system out of crypto’s drama and he is hopeful that the sector can work out its recent issues without causing any significant damage to it. He added that this may be attributable in part to limited connections between the two ecosystems.

Waller’s View on Prudent Innovation

Waller said he supports prudent innovation in finance while also being concerned with banks engaging in activities with heightened risks such as fraud and scams, legal uncertainties and inaccurate disclosures. If a bank wants to involve itself in cryptocurrency it must be very clear about customer’s business models, risk-management systems and corporate governance structures so that they don’t get hurt if there is a crypto meltdown.

Crypto Industry Maturity

Waller believes that with time digital assets industry will mature and will work out its transparency, governance, and risk management issues successfully which will allow for more opportunities for interaction between this industry and traditional banking system .

Crypto Sector’s Recent Issues

The cryptocurrency sector has had some recent issues including FTX collapse which caused no major harm to US banking system because of lack of connection between them according to Waller . However still these kinds of incidents raise concerns about safety within this industry .

Conclusion

In conclusion , it seems like US regulators prefer keeping crypto apart from banks which appears beneficial due to lessened risks associated with it . With time , Waller expects digital assets industry will mature leading more chances for interactions between traditional banking system & cryptocurrency sector .