Fed's Waller Pushes AI and Stablecoins as Payments Fix While Colleagues Split Over Inflation Risk

Federal Reserve Governor Christopher Waller told a room of global bankers in Miami on Tuesday, September 29, that they should stop treating artificial intelligence as a threat and start using it to fix broken payment systems.

Speaking at Sibos 2026, the annual conference hosted by SWIFT, the messaging network behind most interbank transfers worldwide, Waller focused on what he called agentic AI: systems that can act on their own to handle tasks like sanctions screening, fraud checks and payment routing without a human reviewing each step, according to American Banker.

"Agentic transactions could materially change the frequency and timing of payments, as well as other characteristics," Waller said, according to American Banker. "Meeting this moment requires a proactive approach that balances innovation with the safety, integrity, and stability that underpin trust in payments."

Waller said AI's "contextual awareness" can cut down on false alarms in anti-money-laundering systems. "Research has demonstrated that they can significantly reduce false-positive alerts for illicit activity," he said, per American Banker, adding that this frees up compliance staff to focus on genuinely high-risk transactions instead of flagging legitimate ones.

He didn't ignore the downside. Waller said fears that AI will make cyberattacks bigger and more sophisticated are legitimate, and that the fight isn't fair: "Threat actors need to exploit only one key vulnerability, whereas payment system operators and service providers need to defend a large attack surface," he said.

A Year-Old Vision, Restated

Waller's Miami remarks build directly on a speech he gave a year earlier, on September 29, 2025, at Sibos 2025 in Frankfurt, an event that drew more than 12,400 delegates, according to Token Post. There, Waller laid out the same basic case for distributed ledger technology, tokenization, smart contracts and stablecoins as tools to speed up settlement and cut manual reconciliation work.

"We should not fear new technologies, nor new types of providers," Waller said in Frankfurt, according to Token Post. He described stablecoins as another choice available to consumers and businesses alongside cash and bank deposits, and noted that under the GENIUS Act, stablecoins must be backed at least 1-to-1 by safe, liquid assets and redeemable at par.

Waller said the Fed is doing "hands-on research on the latest wave of innovations, including tokenization, smart contracts, and AI in payments," to evaluate whether its own infrastructure, including the FedNow real-time payment system launched in 2023, needs updating.

Not Every Fed Official Is On Board With the Optimism

Waller isn't speaking for the whole Fed. Fed Chairman Kevin Warsh has echoed Waller's enthusiasm for AI's economic upside, rejecting the idea that AI's concentration in a capital-intensive sector makes the spending less real. "AI investment is a legitimate part of GDP today," Warsh said at a Reuters event on September 3, according to Breitbart.

Governor Lisa Cook struck a different tone in a speech delivered Monday, September 28, the day before Waller's Miami remarks, giving "greater attention to the inflationary pressures that could arrive ahead of the productivity gains," Breitbart reported.

Warsh, who voted for a rate hike earlier this month, has said he doesn't see AI as a major inflation driver because wage growth adjusted for productivity remains consistent with inflation cooling toward the Fed's 2% target. But he's flagged other upside risks: energy prices, tech goods prices tied to the AI buildout, and the possibility of more tariff increases, according to Breitbart.

The stakes for that internal debate are large. AI infrastructure spending on data centers, chips and servers is on pace to hit roughly $1 trillion this year, more than annual U.S. military spending, according to JPMorgan figures cited by CNN. Columbia University economist Stijn Van Nieuwerburgh, in a paper published by the Brookings Institution, projects that figure could reach $10.3 trillion cumulatively through 2032, with AI infrastructure spending averaging 3.6% of GDP annually over that stretch, up from 1.9% this year, according to Goldman Sachs estimates cited by CNN.

CNN frames that spending as one of three forces, alongside energy shocks tied to the wars in Iran and Ukraine and an escalating trade war, pushing prices and interest rates higher "too quickly for comfort." Whether AI capex is genuinely inflationary or simply misunderstood productive investment is a live dispute inside the Fed itself, not a settled fact.

The Regulatory Mess Waller Didn't Mention

Waller's stablecoin optimism runs into a messier reality on Capitol Hill. The GENIUS Act, signed into law in July 2025, bars stablecoin issuers from paying interest, unlike bank deposits, which do. Exchanges have since started paying "rewards" that function like interest to get around the rule, according to EJ Antoni of the Daily Signal.

The pending Clarity Act would decide whether to close that loophole by extending the prohibition to exchanges and affiliates too. Antoni argues the entire setup treats functionally identical financial products differently depending on whether they run on a bank ledger or a blockchain, calling it "regulatory arbitrage" that benefits large industry players with lobbying budgets over community banks and everyday depositors.

That fight in Congress remains unresolved. Waller's speech in Miami didn't address it directly, leaving the practical question of how stablecoins actually get regulated, and who benefits from the current split-track system, in the hands of lawmakers still negotiating the Clarity Act's final language.