US Federal Reserve Governor Christopher Waller used the Sibos 2025 stage to highlight the Fed’s growing interest in new technologies shaping the financial system.
He disclosed that the central bank is conducting hands-on research into tokenization, smart contracts, and artificial intelligence in the payments sector.
According to Waller, this work is designed to understand how private innovators deploy these tools and determine where infrastructure upgrades to the Fed’s infrastructure may be possible.
Focus on stablecoins
In his remarks, Waller urged regulators and industry participants to view stablecoins as a continuation of America’s long tradition of payment innovation.
He argued that stablecoins should be recognized as another legitimate payment option, as consumers once gained choices through banks, card networks, and fintech firms.
According to Wallerm, these digital assets represent “a new form of private money” that can coexist with existing payment instruments if supported by robust safeguards.
By positioning stablecoins this way, Waller tied their adoption to the US culture of choice and competition. He said:
“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 said that introducing stablecoins into this mix could push incumbents to lower costs and improve service quality.
Waller emphasized that the competitive effects of blockchain-based solutions would pressure traditional players to innovate and deliver tangible products, especially in cross-border payments.
He pointed out that the remittance corridors remain expensive due to the complex web of infrastructure and intermediaries. However, he believes that stablecoins could cut through that complexity, offering efficiency gains that translate into lower fees for end-users.
Risk management
However, Waller stressed that no technology should be adopted without oversight.
In his view, regulatory protections are crucial to ensuring stablecoins earn public trust while maintaining financial stability.
According to him, the new systems could expose consumers to cybersecurity threats and systemic vulnerabilities due to the lack of common standards and coordinated risk management.
He said:
“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.”