Fed opens the door to crypto at Payments Innovation Conference
The Federal Reserve held its Payments Innovation Conference and, for the first time, put crypto at center stage – from stablecoins and tokenization to AI‑driven payments. Setting the tone, Governor Christopher J. Waller teased a “skinny master account” idea to give eligible fintech and crypto firms limited, direct access to Fed payment rails.
Governor Waller outlined a prototype for a payment‑only access framework – a connection for institutions already eligible under current rules. It would not pay interest, allow overdrafts, or grant discount‑window access, and staff could cap balances. He framed it as a lower‑risk, faster‑review path and invited industry feedback as the idea moves through an exploratory phase. The proposal signals a live policy shift: constrained, direct access for crypto‑native and fintech payment firms to Fed rails, which firms like Custodia, Kraken, and Anchorage have sought for years.
The opening panel on bridging TradFi and digital assets focused on interoperability and risk plumbing. Chainlink’s Sergey Nazarov argued the Fed should make existing systems interoperable with stablecoins and tokenized deposits, while Lead Bank’s Jackie Reses urged caution on the basics – wallet infrastructure, on‑/off‑ramps, and fraud controls. BNY’s Jennifer Barker mapped regulator priorities to four buckets: 24/7 rails, common technical standards, stronger fraud detection, and liquidity/redemption frameworks for tokenized deposits and stablecoins. Fireblocks’ Michael Shaulov flagged balance‑sheet and credit‑market implications as stablecoins scale.
A stablecoin and business‑model session put usability and operational rigor under the microscope. Paxos CEO Charles Cascarilla used a recent internal over‑mint incident to argue that on‑chain transparency makes mistakes visible and fixable, but stressed the need to automate issuance while keeping human oversight. The takeaway for policy and product is operational realism: institutional crypto will need more automation, auditable issuance trails, and circuit‑breakers before volumes can scale.
Fifth Third’s Tim Spence, DolarApp’s Fernando Terres, and Circle’s Heath Tarbert focused on redemption discipline, compliance, and cross‑border use cases.
The AI‑in‑payments panel turned to agentic money. ARK Invest’s Cathie Wood said autonomous, AI‑driven payments could push real GDP growth meaningfully higher, while Stripe’s Emily Sands emphasized merchant integration and fraud risk. Google Cloud’s Richard Widmann and Coinbase CFO Alesia Haas converged on the same point: programmable stablecoins are the natural settlement leg for machine‑to‑machine transactions and micro‑payments. Across the day, a clear consensus emerged that programmable dollars – whether bank‑issued tokens or compliant stablecoins – are the cash leg for agentic payments and on‑chain portfolios.
On tokenization, Franklin Templeton CEO Jenny Johnson, DRW founder Don Wilson, BlackRock COO Rob Goldstein, and JPM Kinexys co‑head Kara Kennedy agreed the migration of frequently traded instruments on‑chain is inevitable. Wallets already hold trillions in tokenized or digitally custodied assets. Over the next five years, they expect more stocks, bonds and funds to live on programmable rails as standards and bank money on‑chain mature. In other words, tokenization is moving from pilot to pipeline as standards, 24/7 rails, and risk/ops playbooks harden. Waller’s closing echoed the day’s arc: consumers don’t need to grasp the plumbing; regulators and industry must make it efficient and safe.
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