Waller Advocates for Technological Innovation in Finance
Christopher Waller, a Federal Reserve Governor and a prominent candidate for the next Chair of the Federal Reserve, is advocating for the incorporation of a “technology-driven revolution” in artificial intelligence and stablecoin sectors. He believes that decentralized finance (DeFi), when fostered through cooperation between the private sector and the Federal Reserve, can positively impact the payment system. Waller emphasized the need for both public and private entities to embrace innovation.
Insights from the Jackson Hole Symposium
As preparations unfold for the Jackson Hole Global Central Bank Annual Symposium, the cryptocurrency sector is organizing a blockchain seminar there, expected to draw participation from senior officials in both the Federal Reserve and the SEC, along with notable figures such as Donald Trump’s son. During a recent meeting, Waller expressed his commitment to advancing the “technology-driven revolution” in AI and stablecoins, asserting that it could bolster the U.S. economy.
Reassurance on Digital Asset Innovation
Waller addressed concerns about digital asset innovation, declaring it “not something to fear.” He pointed out that the evolution in the payment system is fueled by advancements in computing power, data processing, and distributed networks, leading to emerging innovative payment solutions.
“There is nothing to fear when considering smart contracts, tokenization, or distributed ledgers.”
“Using innovative technologies to create new payment services is not a new idea.”
Support for Private Sector Collaboration
Having been appointed by Trump in 2020, Waller has consistently advocated for integrating technologies in DeFi alongside conventional payment systems. He noted that distributed ledger technology, for instance, could enhance the efficiency of asset transfers. In recent remarks, he underscored that collaboration between the private sector and the Federal Reserve is crucial for deriving positive outcomes from DeFi.
Exploration of New Payment Technologies
In 2023, the Federal Reserve introduced the anticipated FedNow payment network, enabling eligible banks to execute instant fund transfers. Waller mentioned that the Federal Reserve is investigating innovative payment technologies, including tokenization, smart contracts, and AI applications. He remarked that while the central bank may not follow a specific path, understanding these trends is vital for enhancing support to private enterprises and evaluating advancements that could improve existing platforms.
“I believe the Federal Reserve should further engage with industry innovators, especially as traditional finance increasingly intertwines with the digital asset ecosystem.”
Positive Sentiment Towards Cryptocurrency
Waller is not the only Federal Reserve official acknowledging the potential of the cryptocurrency industry this week; Vice Chair for Supervision Michelle Bowman also highlighted the importance of the banking sector acknowledging new technologies during a summit. She remarked that regulators must adopt an accommodating approach towards innovations like AI and cryptocurrencies to maintain their relevance in the economy.
