A Federal Reserve Governor says digital assets and AI could reshape the mechanics of global finance while driving down costs and risks for consumers.
Speaking at the Sibos conference, Fed Governor Christopher Waller says stablecoins are a new form of private money and positions AI as a critical tool for fraud prevention and compliance.
He says the technologies can expand choice in payments and enhance resilience across borders. Waller frames his remarks in the history of payment innovation, from paper to electronic systems to today’s shift toward real-time settlement. He argues that new instruments should be viewed as extensions of that trend rather than threats to existing systems.
“Stablecoins are simply a new form of private money and will exist alongside these other payment instruments, provided consumers accept them as safe, low-risk assets with regulatory protections.”
He ties stablecoins directly to international commerce, pointing to remittances and cross-border transactions where dollar-based tokens are already proving cheaper and faster than traditional rails. He highlights the so-called “stablecoin sandwich” model, fiat currency converted to a token, transferred abroad, and converted back into local money, as a way to lower costs and improve transparency.
Turning to AI, Waller underscores the efficiency gains of automation.
“AI can further improve the efficiency of payments in a number of ways, including through automating manual tasks, detecting fraud or compliance risks, and now with agentic AI, executing tasks on behalf of a person or company quickly and cheaply through the use of AI agents.
Let’s again take the example of cross-border payments, which involve multiple jurisdictions, each with its own compliance requirements. Firms are increasingly exploring AI and machine learning (as well as smart contracts) to automate compliance activities.”
Waller says the responsibility for innovation rests with private firms, while noting that the Fed can provide infrastructure, clarity, and forums for coordination. He points to the GENIUS Act’s 1:1 reserve requirement for payment stablecoins as an example of a regulatory framework that could sustain trust.
“I often argue that the private sector can most reliably and efficiently allocate resources and take risks to explore the value of new technologies. The private sector is also best positioned to serve consumers and provide products and services that meet their needs. You don’t want the government to decide what technologies are in or out, or decide what consumers want.”
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