Federal Reserve To Host October Conference On Convergence Of Traditional And Decentralized Finance

The U.S. Federal Reserve will host a payments innovation conference on Oct. 21, with a central focus on the convergence of traditional and decentralized finance.

The agenda also includes discussions on stablecoins, artificial intelligence in payments, and the tokenization of financial products.

What Happened:

Governor Christopher J. Waller said the event reflects the Fed's ongoing attention to technological change in finance.

"Innovation has been a constant in payments to meet the changing needs of consumers and businesses," Waller noted. "I look forward to examining the opportunities and challenges of new technologies, bringing together ideas on how to improve the safety and efficiency of payments, and hearing from those helping to shape the future of payments."

The Federal Reserve has been active in modernizing U.S. payment infrastructure.

In July 2023, it launched FedNow, a real-time payments system that enables instant 24/7 bank transfers, marking a major step in domestic payment modernization.

The upcoming conference builds on that trajectory by explicitly including decentralized finance (DeFi) in its agenda, one of the first times the Fed has formally recognized DeFi's role in payments.

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Why It Matters: Stablecoins are also expected to be a focal point.

In recent years, U.S. policymakers have debated legislation to regulate stablecoin issuers, with regulators warning that widely used tokens may need to comply with bank-like safeguards to mitigate systemic risks.

Artificial intelligence has already seen broad application in payments and banking, particularly in fraud detection and transaction monitoring by firms such as Visa (NYSE:V), Mastercard (NYSE:MA), and major U.S. banks.

The Fed's decision to spotlight AI underscores its view that the technology is no longer peripheral but central to the evolution of payments infrastructure.

Tokenization will be another area of discussion.

Pilot projects such as JPMorgan's (NYSE:JPM) Onyx platform and Broadridge's blockchain-based repo platform have already demonstrated the potential of tokenized assets in real-world financial markets, moving billions of dollars in transactions.

By including tokenization, the Fed is aligning its discussions with ongoing developments in both private and public markets.

The conference will be livestreamed on the Federal Reserve's website, with further details on participants and panels to be released in the coming weeks.

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