Fed’s Waller Says AI, Stablecoins and Tokenization Could Improve Payments
The Federal Reserve governor said wider adoption will depend on cybersecurity, interoperability, anti-money-laundering controls and financial-system resilience.
Federal Reserve Governor Christopher J. Waller said artificial intelligence, stablecoins, tokenization and distributed-ledger technology could make payments faster, more efficient and more flexible, provided new systems meet safeguards for consumers and the financial system.
Speaking at Sibos 2025 in Frankfurt on Sept. 29, 2025, Waller described stablecoins as another private payment option that could exist alongside cash, bank deposits and nonbank payment balances.
“I see stablecoins, for example, as simply another choice available to consumers and businesses,” Waller said.
Waller said distributed-ledger platforms could support real-time payments and securities transfers around the clock. Smart contracts could automate conditions and settlement, while new payment rails would need to connect with existing infrastructure.
Cross-border payments remain more difficult because of complex networks and intermediaries, which contribute to higher costs, slower speeds, limited transparency and barriers to access, Waller said.
He also said financial firms are exploring artificial intelligence and machine learning to automate compliance activities. Agentic AI could go further by executing tasks for individuals or companies.
Waller framed the technologies as part of broader competition among banks, fintech companies, payment providers and blockchain-based systems. He said wider adoption would depend on interoperability, cybersecurity, anti-money-laundering controls, resilience and consumer protection.
“We should not fear new technologies, nor new types of providers,” Waller said.
Under frameworks such as the GENIUS Act, Waller said stablecoins would be backed at least 1-to-1 by safe, liquid assets and redeemable at par. Federal Reserve proposals for the sector have focused on reserve requirements and issuer approval.
The Federal Reserve is conducting hands-on research into tokenization, smart contracts and artificial intelligence in payments to understand private-sector applications and possible upgrades to its payment infrastructure.
“At the Federal Reserve, we are conducting hands-on research on the latest wave of innovations, including tokenization, smart contracts, and AI in payments,” Waller said.
Sibos 2025 was held in Frankfurt from Sept. 29 to Oct. 2, 2025, with more than 12,400 delegates attending the financial-services conference.
