Federal Reserve’s Waller embraces AI, stablecoins, and tokenization as future of payments

Federal Reserve Governor Christopher Waller stood before a crowd of global bankers in Frankfurt and told them, essentially, to stop worrying and learn to love the machines.

Speaking at Sibos 2025 on September 29, Waller laid out a vision for payments innovation that leans heavily on artificial intelligence, distributed ledger technology, tokenized assets, smart contracts, and stablecoins.

What Waller actually said

The speech, titled “The Next Frontier of Payments Innovation,” centered on how emerging technologies can solve longstanding problems in cross-border payments.

Waller argued that AI, particularly what he called “agentic AI,” can automate compliance processes that currently create bottlenecks in international transfers. Agentic AI refers to systems capable of autonomous task execution, handling things like sanctions screening, fraud detection, and regulatory checks without a human manually reviewing every transaction.

Beyond AI, Waller praised the potential of distributed ledger technology and tokenization to make payment rails faster and more transparent. Smart contracts, self-executing code that triggers actions when conditions are met, could eliminate much of the manual reconciliation work that slows down settlement between institutions.

Perhaps most notable was Waller’s explicit mention of stablecoins as part of this technological toolkit. He told the audience there is “no need to fear new technologies or payment providers,” framing DLT, AI, and stablecoins together as complementary forces for building smarter payment infrastructure.

Why Sibos matters as the venue

Sibos is organized by SWIFT, the messaging network that underpins most of the world’s interbank communications. The 2025 edition’s theme focused on “the next frontiers of global finance,” and Waller’s remarks fit squarely within that framing. Other sessions at the event and related Fed discussions have addressed agentic commerce, the regulation of AI agents in financial services, and the challenge of making legacy banking systems interoperable with tokenized frameworks.

The Fed’s research posture

Waller made clear that the Federal Reserve is actively conducting technical research on tokenization, smart contracts, and AI applications in payments. The Fed is evaluating whether these technologies warrant changes to its own payment infrastructure, which includes systems like FedNow, its real-time payment service launched in 2023.

What this means for the industry

The emphasis on agentic AI in compliance is particularly relevant for companies working on automated know-your-customer and anti-money-laundering solutions.

Stablecoin issuers also have reason to pay attention. The Fed governor putting stablecoins in the same sentence as DLT and AI as tools for payment improvement lends institutional credibility to a sector that has been fighting for regulatory legitimacy. With stablecoin legislation still working its way through Congress, having a Fed governor publicly endorse their utility in payments could influence how lawmakers approach the regulatory framework.

The interoperability challenge Waller highlighted also creates opportunities for middleware providers, the companies building bridges between traditional banking infrastructure and tokenized systems.