US Federal Reserve Governor Highlights Interest in New Financial Technologies

US Federal Reserve Governor Christopher Waller used the Sibos 2025 stage to underscore the Fed’s growing fascination with emerging technologies impacting the financial system.

He revealed that the central bank is actively researching tokenization, smart contracts, and artificial intelligence within the payments domain.

According to Waller, this endeavor aims to grasp how private innovators utilize these tools and identify potential areas for upgrading the Fed’s infrastructure.

Focus on Stablecoins

In his speech, Waller encouraged regulators and industry stakeholders to view stablecoins as an extension of America’s long-standing payment innovation tradition.

He contended that stablecoins should be recognized as valid payment options, following the diverse choices consumers historically had through banks, card networks, and fintech firms.

Waller described these digital assets as “a new form of private money” that can coexist with current payment systems, provided they are backed by strong safeguards.

By framing stablecoins this way, Waller linked their acceptance to the US culture of choice and competition. He mentioned:

> “I may choose one provider if I want to park my emergency fund in a high-yield savings account, and I may choose different providers if I want to process a cross-border payment, pay someone with a QR code, or buy a crypto-asset. A choice of providers also encourages competition on cost, speed, efficiency, and user experience.”

Waller noted that individuals often prioritize speed and convenience, while businesses focus on liquidity management and settlement efficiency. He argued that introducing stablecoins could motivate established players to reduce costs and enhance service quality.

Waller stressed that competitive pressures from blockchain-based solutions would urge traditional players to innovate and provide tangible products, especially in cross-border payments.

He highlighted the high costs associated with remittance corridors due to the complicated infrastructure and numerous intermediaries. However, he believes stablecoins could simplify this complexity, leading to efficiency gains and lower fees for end-users.

Risk Management

Despite the potential benefits, Waller emphasized that no technology should be adopted without proper oversight.

He asserted that regulatory protections are essential to ensure stablecoins gain public trust while preserving financial stability.

Waller warned that new systems could expose consumers to cybersecurity risks and systemic vulnerabilities due to a lack of common standards and coordinated risk management.

He asserted:

> “Achieving security and resilience means ensuring these digital platforms are hardened against misuse, with redundancy and safeguards in place that match the scale of domestic and global payments.”