Federal Reserve Chairman frontrunner Waller: Ethereum and stablecoins are the next step in payment development, and institutions should adopt them

2025-09-01 12:48:14

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The leading candidate for the next Federal Reserve Chair, Waller, has openly expressed optimism about digital assets, particularly Ethereum and stablecoins, urging financial institutions to embrace cryptocurrencies as a natural next step in the evolution of payments.

Written by: Xu Chao

Source: Wall Street Journal

The frontrunner for the next Federal Reserve Chair, Fed Governor Waller, delivered an important speech expressing optimism about digital assets (especially Ethereum and stablecoins), stating that the GENIUS Act is making positive progress. The outside world sees this as significant policy support for institutional adoption of digital assets like stablecoins and Ethereum.

On Thursday local time, Fed Governor Waller spoke at the 2025 Wyoming Blockchain Symposium.

Waller praised Ethereum and stablecoins as the natural next step in the development of payment technology, stating that smart contracts, tokenization, and distributed ledgers do not pose risks in everyday use, urging financial institutions to embrace cryptocurrencies as a natural progression in payment development.

In terms of regulation, Waller described the GENIUS Act as "a good start" and committed to gradually addressing existing issues as the process advances.

Waller's stance on positioning Ethereum and stablecoins as foundational financial infrastructure resonates with key regulatory legislation passed in 2025. This statement is interpreted by the market as a positive signal for the re-evaluation of cryptocurrencies.

The GENIUS Act requires stablecoin issuers to hold a 1:1 reserve of high-quality liquid assets, while the CLARITY Act clarifies the regulatory framework for digital commodities, eliminating regulatory uncertainty for institutional investors.

Regulatory Framework Boosts Institutional Confidence

The GENIUS Act took effect in July 2025, establishing the first federal regulatory framework for stablecoins in the United States.

The Act requires stablecoin issuers to hold high-quality liquid assets such as U.S. Treasury securities and cash as a 1:1 reserve, and clarifies the supervisory responsibilities of banking regulators like the OCC and FDIC.

To complement the GENIUS Act, the House passed the CLARITY Act in July 2025, further clarifying the jurisdictional boundaries of the SEC and CFTC.

This Act classifies non-stablecoin assets like Bitcoin and Ethereum as "digital commodities" regulated by the CFTC, eliminating regulatory ambiguity for asset management companies and institutional investors.

This dual legislative framework creates a favorable environment for institutional adoption, driving rapid growth in Ethereum-based tokenized assets and ETFs.

Regulatory clarity directly promotes institutional investment in Ethereum and stablecoins.

As of the third quarter of 2025, the asset management scale of Ethereum ETFs reached $27.6 billion, with inflows surpassing those of Bitcoin ETFs. BlackRock's ETHA ETF attracted $10 billion in assets under management within ten days of its launch.

Corporate funds are also being reallocated to the Ethereum space, with over 64 companies investing $10.1 billion in staking and tokenizing real-world assets.

Platforms like BlackRock's BUIDL and Franklin Templeton's Progmat are leveraging Ethereum's infrastructure to provide decentralized ownership of assets, combining traditional finance with blockchain programmability.

Ethereum's technological upgrades further enhance its appeal to institutional investors. After Ethereum completed the Pectra and Dencun upgrades, gas fees (transaction fees) on Ethereum decreased by 90%.

The reduction in fees directly lowers the cost of running decentralized finance (DeFi) applications on Ethereum, attracting more institutional funds. The total value locked (TVL) in DeFi reached $223 billion, with significant funds being invested in lending, staking, liquidity pools, and other decentralized finance products.

Ethereum's dominant position in the stablecoin ecosystem is further solidified, with stablecoins issued and circulated on Ethereum accounting for 50% of the global market share.
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