Federal Reserve Governor Christopher Waller has recently stated that there's "nothing to be afraid of" when it comes to decentralized finance (DeFi), urging fellow policymakers and bankers to embrace the technology. Speaking at the Wyoming Blockchain Symposium 2025, Waller framed DeFi as a natural technological evolution, comparing blockchain-based transactions to everyday purchases. He emphasized that using cryptocurrency to buy goods and services is no different from using a digital dollar.

Waller, who serves as the Fed board's oversight governor for reserve bank operations and payment systems, stated that DeFi is simply a new technology to transfer objects and record transactions. He believes that smart contracts, tokenization, and distributed ledgers shouldn't be viewed with apprehension. He also noted that the evolution of the payment system has long been a story of technological advancement.

The Fed Governor advocated for private sector-led innovation as the primary driver of payment system advancement, citing stablecoins as a prime example of market-driven solutions. He also credited stablecoin development with extending dollar accessibility globally, particularly in high-inflation countries lacking affordable banking services. Waller highlighted stablecoins' potential to "maintain and extend the role of the dollar internationally" while improving retail and cross-border payments through 24/7 availability and fast transferability.

Waller's comments build upon previous pro-innovation positions he has expressed. In October 2024, he argued that DeFi would more likely complement traditional finance rather than replace it entirely. He acknowledged DeFi's potential to streamline financial activities while maintaining that intermediaries serve valuable functions for most individuals. In November 2024, Waller advocated for market-driven solutions in crypto and payments, emphasizing the benefits of private sector competition in fostering innovation.

His recent remarks come at a time when DeFi is evolving beyond speculative trading and into more functional use cases such as peer-to-peer lending, stablecoin systems, and cross-border payments. The DeFi sector has seen robust growth, with the total value locked (TVL) rising by over 30% in July 2025, reaching $259 billion by the end of the month.

Waller also revealed that the Federal Reserve is exploring a new wave of technological innovations, including tokenization, smart contracts, and AI payments. He emphasized that understanding these trends is crucial for the Fed, not only to better support private enterprises using the relevant infrastructure but also to evaluate whether emerging technologies have the potential to improve the Federal Reserve's existing platforms and services.

The Fed Governor's statements signal a potentially significant shift in the central bank's approach to cryptocurrency. The Fed recently withdrew its 2022 guidance that discouraged banks from engaging in crypto and stablecoin activities and concluded its risk-focused "novel activities supervision program" that monitored crypto-related activities. Furthermore, Fed Vice Chair for Supervision Michelle Bowman suggested that staff should be permitted to hold small amounts of cryptocurrency to gain a better understanding of the technology.