Governor Christopher Waller’s opening remarks at the Payments Innovation Conference marked a significant shift in the Federal Reserve’s approach to financial innovation. Waller emphasized the importance of embracing disruption in the payments sector, particularly from advancements in crypto and DeFi technologies.

The conference, the first of its kind, aimed to bring together traditional payment incumbents and new entrants from the DeFi world to discuss the future of payments in the United States. Waller highlighted the transformative potential of integrating breakthroughs in technologies like distributed ledgers, tokenized assets, and artificial intelligence into the mainstream payments ecosystem. These innovations promise faster, more secure, and more inclusive payments, but he noted that traditional systems still provide essential scale and regulatory standards.

To foster collaboration and innovation, Waller proposed exploring a “skinny” version of the Fed’s master accounts. This would allow crypto firms to access the government’s payment infrastructure without needing the full range of services. The initiative reflects the Fed’s commitment to supporting transformation in the payment system actively.

By embracing disruption and encouraging dialogue between traditional and innovative players, the Federal Reserve seeks to unlock greater efficiency, liquidity, transparency, security, and financial inclusion in the payments industry.