Fed Explores Tokenization, Smart Contracts, and AI in Payments, Governor Waller Says
Key Takeaways
- The Federal Reserve is probing tokenization, smart contracts, and artificial intelligence to further modernize the nation’s payment infrastructure.
- Stablecoins, in conjunction with the recently passed GENIUS Act, are redefining payment landscapes and extending the dollar’s global influence.
Fed is studying tokenization, smart contracts, and AI in payments, says Governor Waller
Fed is studying tokenization, smart contracts, and AI in payments, says Governor Waller, outlining a strategic push to harness emerging technologies for faster, more secure digital settlements. During his appearance at the Wyoming Blockchain Symposium 2025, Waller emphasized the importance of staying ahead of the curve in an era where cryptocurrency and digital assets are reshaping traditional finance.
“As a payment system operator, it is essential to keep pace with novel payment technologies so we can continue to back private sector innovators while exploring how future tools might bolster our existing infrastructure and service offerings,” Waller remarked.
Waller highlighted that regulatory bodies are now collaborating closely with industry leaders to understand new tech and uncover potential upgrades to payment systems. He underscored the growing synergy between conventional banking and the decentralized economy, stressing that cross‑industry partnerships will be pivotal to navigate the evolving digital assets landscape.
Regarding stablecoins, Governor Waller stressed their capacity to reinforce the dollar’s position abroad and streamline both retail and cross‑border transactions. The recent passage of the GENIUS Act landmark law establishing clear rules for US‑issued stablecoins—marks a significant step toward a safer, more resilient stablecoin ecosystem, he noted.
“This legislative milestone is a crucial move for the stablecoin market and could help the ecosystem reach its full potential,” he said.
When discussing artificial intelligence, Waller pointed out that payment firms have been deploying machine learning for decades to combat fraud, prevent money laundering, and predict transaction trends. The surge in large language models and generative AI has further sharpened fraud detection capabilities and fine‑tuned reconciliation processes.
“We are witnessing a ‘technology‑driven revolution’ within the payment sector, powered by breakthroughs in computing power, data analytics, and distributed network solutions, which are igniting new, innovative payment services,” Waller said.
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