Michelle W Bowman: Responsible innovation in money and payments

Speech by Ms Michelle W Bowman, Member of the Board of Governors of the Federal Reserve System, at the roundtable on Central Bank Digital Currency, Harvard Law School Program on International Financial Systems, Washington DC, 17 October 2023.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
18 October 2023

Thank you for the opportunity to speak with you today on the important topic of innovations in money and payments. These issues continue to be of primary importance to the Federal Reserve. As part of its key functions, the Federal Reserve carries out a number of different responsibilities that include

  • fostering a safe and efficient payment system and providing services that support U.S. financial markets and private-sector payment, clearing, and settlement arrangements;
  • promoting the safety and soundness of individual financial institutions and monitoring their impact on the financial system as a whole;
  • setting U.S. monetary policy; and
  • helping to maintain the overall stability of the U.S. financial system and the economy.

As a policymaker, I view responsible innovation through the lens of accomplishing these policy goals.

Innovation in money and payments can take many forms. We have continued to see interest in digital assets, such as crypto-assets, stablecoins, central bank digital currency (CBDC), and programmable payment platforms, including those built on distributed ledger technology (DLT). Alongside these innovations, we have embraced opportunities to improve the existing payment infrastructure by adopting and developing instant payments, planning for future technology upgrades and improvements, and considering other more straightforward changes like expanding operating hours for the wholesale payment infrastructure.