The euphoria surrounding cryptocurrencies, which began after Donald Trump's victory in the U.S. presidential election, is gradually "fading away." This was stated by Federal Reserve Board member Christopher Waller.
During the Trump administration, many participants in the TradFi market increased their investments in digital assets, fueling their growth, the official noted. However, the inability of Congress to swiftly pass a bill on the cryptocurrency market structure has "scared people off" due to the resulting uncertainty.
"The hype mainly came from the financial sector. Then there was a major sell-off simply because traditional firms had to adjust their risk positions," Waller clarified.
The Fed member views the recent decline as "part of the game." He advised those not ready to take risks to "stay out" of crypto trading:
"You enter, make money, you can lose money — that's the nature of the game."
Waller also announced that the Fed will introduce "payment accounts" within the year, aimed at simplifying access for fintech companies and cryptocurrency firms to central bank systems.
According to the official, these payment accounts will "foster innovation while ensuring the safety of the monetary system." Last week, the Fed completed its review of feedback on this proposal.
As a result, the tool for crypto firms will be labeled as "restricted." These accounts will have fewer privileges than those of large banks, depriving companies of the ability to earn interest and imposing limits on the amount of funds.
Recall that on January 30, Trump announced the nomination of Kevin Warsh for the next head of the Fed, succeeding Jerome Powell, whose term ends in May.