Michael S Barr: Exploring the possibilities and risks of new payment technologies
Speech by Mr Michael S Barr, Member of the Board of Governors of the Federal Reserve System, at the 2025 DC Fintech Week, Washington DC, 16 October 2025.
The views expressed in this speech are those of the speaker and not the view of the BIS.
Thank you for the opportunity to speak to you today.
Payments innovation is accelerating. Stablecoins, artificial intelligence (AI), real-time payments, and richer payment metadata offer significant improvements to the cost, speed, and functionality of payments. Better payments functionality can help financial institutions and businesses manage liquidity more efficiently at lower cost. It can also mean that people receive their paychecks more promptly and manage their payments more effectively. Payments innovation is especially important for lower-income individuals who are often underserved by the financial system and lack financial slack.
For the bulk of my remarks today, I will focus on the benefits and risks of stablecoins. Congress has recently passed legislation that provides some clarity to issuers of stablecoins about how they can fit into the regulatory and supervisory framework. While there is a lot of work to do on the part of the government to fill in the specifics during the rule-writing process, increased certainty could lead to more rapid development of stablecoins and related products and services for businesses and households.
Potential Benefits of Stablecoins
I will start with some of the potential benefits of stablecoins. The primary benefit comes from the ledger itself, which can operate globally and encode functionality and conditionality directly into assets and transactions. This functionality unlocks a range of new financial use cases that were previously impractical when transactions required updating a series of ledgers spread across individual financial institutions.