Fed Plans Industry Collaboration on Payments Innovation

Federal Reserve Governor Christopher Waller emphasized the need for the Fed to collaborate with the private sector in modernizing U.S. payment systems through emerging technologies like tokenization, smart contracts, stablecoins, and artificial intelligence. Speaking at the Wyoming Blockchain Symposium, Waller highlighted a technology-driven revolution in payments and urged embracing innovative solutions to improve efficiency while maintaining financial system safety. He framed stablecoins as a continuation of payment innovations that could enhance cross-border transactions and uphold the dollar's global role, supported by the Trump administration's recent GENIUS Act which sets federal guidelines for payment stablecoins. Waller advocated for a pro-market approach where private firms lead innovation, with the Fed providing infrastructure upgrades and oversight, including exploring AI applications to detect fraud and improve transaction reconciliation. The Federal Reserve is actively conducting technical research on these technologies to assess opportunities for enhancing its own payment platforms and services. This approach aligns with President Trump’s broader agenda to reinvigorate private-sector dynamism through deregulation and market-driven reforms.