Federal Reserve to Convene Discussion on Cryptocurrencies and Artificial Intelligence for Payment Innovation

The Federal Reserve Board has announced it will host a payments innovation conference on October 21, 2021. The event, which will be livestreamed on the Federal Reserve's website, aims to discuss ways to innovate and improve the payments system.

The conference will feature panel discussions on a variety of topics, including the convergence of traditional and decentralized finance, the intersection of artificial intelligence and payments, new stablecoin use cases, and the tokenization of financial products and services.

One of the keynote speakers, Jakob Kronbichler, CEO of Clearpool, emphasizes the importance of clear, unified rules for on-chain financing solutions to scale without fragmentation. He also notes that stablecoins are no longer fringe experiments but core parts of the payments stack. Kronbichler further emphasizes the need for clarity in rules recognizing stablecoins as settlement assets and creating consistent standards for tokenized credit and liquidity markets.

Regulatory clarity is also a focus of the Commodity Futures Trading Commission (CFTC), which is currently in the public consultation phase of its "Crypto Sprint." The initiative, which runs through October 20, is assessing custody, leveraged retail trading, and consumer protections in the crypto space.

The move by the SEC and CFTC is aimed at advancing regulatory clarity and market choice. The Fed's October conference announcement follows a joint SEC and CFTC statement on Monday seeking to clarify how registered exchanges may list certain spot crypto products.

Policy dialogues and pilots from the Monetary Authority of Singapore and the Bank for International Settlements are scheduled just weeks after the Fed's conference announcement. The conference's focus on stablecoins and tokenization indicates that the Fed and regulators are viewing digital assets through the same policy lens as traditional payments.

The event will bring together regulators, academics, and industry participants to discuss the future of payments in the United States. Further details about the conference are yet to be announced.

Innovation has been a constant in payments to meet the changing needs of consumers and businesses, according to Federal Reserve Governor Christopher J. Waller. Kronbichler also highlights the need for AI models to be explainable and testable with clear governance and human oversight.

As the payments landscape continues to evolve, the Federal Reserve's payments innovation conference promises to be an important gathering for those interested in the future of payments in the United States.