Waller added that he has yet to have an interview for the role of Fed chair and does not have one set.
The Federal Reserve has announced its plans to host a conference on October 21 to discuss improving the payments system to attract new businesses tied to crypto and artificial intelligence.
The conference seeks to address the convergence of traditional and decentralized finance, new use cases and business models for stablecoins, and the tokenization of financial products and services. The conference will also look into the intersection of payments and AI.
In the announcement, Governor Christopher Waller said, “Innovation has been a constant in payments to meet the changing needs of consumers and businesses [..] 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.”
This payment system conversation was initiated by Waller late last month. According to him, buying crypto with stablecoins through smart contracts follows the same fundamental process as using debit cards at grocery stores. He also said that there is nothing to be afraid of when thinking about using smart contracts, tokenization, or distributed ledgers in everyday transactions.
The Federal Reserve is extremely involved in the payments business. According to a FedNow information sheet from last month, since July 2023, it has been running the FedNow real-time payments program. The program has around 1,400 participating banks and $2.7 billion in daily transactions.
It also manages the Fedwire Funds Service, and its regional bank system acts as an operator, along with The Clearing House, for ACH payments.
Recently, Governor Christopher Waller said, “It is my belief that the Federal Reserve could benefit from further engagement with innovators in industry, particularly as there is increased convergence between the traditional financial sector and the digital asset ecosystem.”
According to him, the Fed must understand whether emerging technologies could provide opportunities to improve our existing platforms and services. Waller also advocates for private sector-led innovation as the primary driver of payment system advancement. He calls stablecoins the latest example of market-driven solutions.
Other than being a pro-crypto, like Trump, Waller also supports rate cuts. Today, the Fed governor repeated his support for September rate cuts. According to him, the job market is getting weaker. He added that how quickly the central bank cuts rates after that will depend on what happens next in the economy.
In an interview on CNBC, Waller said, “I think we need to start cutting rates at the next meeting, and then we don’t have to go in a locked sequence of steps […] We can kind of see where things are going, because people are still worried about tariff inflation … I would say over the next three to six months, we could see multiple cuts coming in.”
He thinks that tariffs might raise inflation in the next few months, but he thinks it will only be for a short time and that inflation will start to fall toward the Fed’s 2% goal in six or seven months.
He indicated that because there is less demand for workers, the Fed should start lowering the policy rate from its current 4.25%-4.50% range toward an estimated neutral rate of 3%. The speed of these changes should depend on economic data.
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