FED Administrator Christopher Waller said in a statement today that stablecoins will give the Fed greater reach in the DeFi world.
Waller said on Thursday that the speed with which depositors withdraw their money from Silicon Valley Bank exceeds the Fed's ability to act as a last resort, emphasizing the importance of faster processing of emergency loans.
Waller: "Banking Crisis Calmed"
Waller said last week that one of the reasons he believes the Fed can focus on tackling high inflation with further policy tightening is the calm in the banking sector.
Walller said, “This is a feature of bank crises, it is a state of panic; once stopped, it does no real fundamental damage to the economy or the banking system.” said.
The Fed is currently reviewing what led to the SVB's bankruptcy and what policy adjustments might be needed to prevent a recurrence. Waller's comments on the Fed's need for speed in the emergency loan "discount window" point to a potential solution.
“If they want the flow of deposits to be faster, we need to think about how we do the pricing faster, how we do the collateral assessment, it needs to be faster, that's one of the things I've personally learned from this incident: to make the discount window more effective, we need to think about how we're going to do the pricing faster,” Waller said. We need to be able to do it,” he said.
*Not investment advice.