Fed Turns Toward Stablecoins as Regulation Enters New Era

The U.S. Federal Reserve has announced a Payments Innovation Conference, scheduled for October 21, 2025, with a focus on stablecoins, decentralized finance (DeFi), and tokenization. The event will bring together stakeholders from the financial sector to explore innovations in payment systems and address challenges associated with integrating digital assets into the mainstream economy. The conference follows recent developments in U.S. cryptocurrency regulation, including the passage of the GENIUS Act, the first official U.S. cryptocurrency regulation, in July 2025.

Governor Christopher J. Waller emphasized the importance of the conference in addressing the opportunities and risks posed by emerging technologies. “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,” he stated. The event is expected to feature panel discussions on the intersection of traditional and decentralized finance, stablecoin use cases, and the role of artificial intelligence in payments.

This initiative aligns with the Fed’s broader interest in understanding and potentially supporting the integration of stablecoins into the U.S. financial system. Fed Governor Michelle Bowman has previously expressed openness to stablecoins and other digital assets, noting that bank regulators are already working on creating a regulatory framework for blockchain adoption. The Fed’s recent withdrawal of certain guidance related to crypto activities involving banks and the conclusion of its crypto activities supervision program in August 2025 indicate a shift in its approach toward digital assets, reflecting a more accommodating regulatory environment under President Donald Trump’s administration.

Global stablecoin usage has grown significantly, reaching approximately $280 billion, with the majority of stablecoins pegged to the U.S. dollar. The U.S. regulatory developments are expected to influence global stablecoin dynamics, particularly in Europe, where the European Central Bank (ECB) has urged stricter rules for non-EU stablecoins. ECB President Christine Lagarde has called for robust oversight of stablecoins outside the EU’s Markets in Crypto-Assets (MiCA) framework, warning of potential risks such as redemption issues and insufficient reserves during periods of high demand.

The Fed’s engagement with stablecoins and DeFi reflects a growing recognition of their potential to enhance payment efficiency and financial inclusion. However, the central bank is also aware of the associated risks, including financial instability, regulatory arbitrage, and the potential for government bailouts if stablecoins fail. Nobel laureate Jean Tirole has warned about the lack of sufficient oversight and the possibility of systemic risks should stablecoins collapse during a financial crisis.

The October conference is a key step in the Fed’s ongoing effort to evaluate the role of stablecoins and DeFi in the U.S. financial landscape. It underscores the central bank’s commitment to fostering innovation while ensuring the safety and efficiency of the payments system. As the conference approaches, the outcomes of the discussions may shape the future of digital currency regulation in the United States and beyond.

Source: [1] Federal Reserve to host stablecoin and DeFi-focused ... (https://www.mitrade.com/insights/news/live-news/article-6-1093656-20250904) [2] Federal Reserve to Hold 'Payments Innovation' Conference ... (https://coingape.com/federal-reserve-to-host-payments-innovation-conference-on-stablecoins/)