Federal Reserve Governor Christopher Waller Backs Stablecoins and Tokenization for Future Payments

Federal Reserve Governor Christopher Waller addressed global bankers at the Sibos 2025 conference in Frankfurt on September 29, advocating for the integration of new technologies into the financial system. Waller encouraged the industry to embrace distributed ledger technology, tokenized assets, smart contracts, and stablecoins to improve payment efficiency.

In his speech, titled The Next Frontier of Payments Innovation, Waller specifically pointed to agentic AI as a solution for current bottlenecks in cross-border transactions. He noted that these autonomous systems could handle regulatory checks, fraud detection, and sanctions screening without the need for manual human review.

Waller also highlighted the role of smart contracts and tokenization in streamlining settlement processes between institutions. By using self-executing code, he suggested that the industry could significantly reduce the manual reconciliation work that currently slows down international transfers.

Addressing the audience, Waller stated there is no need to fear new technologies or payment providers. He grouped stablecoins alongside DLT and AI as essential tools for building a more modern and transparent payment infrastructure.

The Federal Reserve is currently conducting technical research into how these innovations might impact its own systems, including the FedNow real-time payment service. The central bank is evaluating whether these technologies require updates to its existing infrastructure.

Waller’s comments carry weight for the stablecoin sector, which has been seeking regulatory legitimacy. His public endorsement of their utility in payments may influence ongoing legislative discussions in Congress regarding stablecoin frameworks.

The focus on interoperability between legacy banking systems and tokenized frameworks also highlights potential growth for middleware providers. These companies are tasked with building the necessary bridges to connect traditional financial infrastructure with emerging digital systems.