Federal Reserve Governor Christopher J. Waller recently gave a speech titled: “Innovations and the Future of Finance,” explicitly focusing on two emerging technologies, namely Tokenization and Artificial Intelligence (AI). He said, “the world is rapidly changing, and we need to be open to the potential benefits of innovation.”

After ChatGPT sparked a technological arms-race among the big tech companies, it is not surprising that Waller decided to focus on AI as one of the emerging technologies to bring advanced innovative solutions to the financial industry. It might, though, come as a surprise that the Fed is appreciating the benefits of blockchain technology, the technology that underlines tokenization (and cryptocurrencies like Bitcoin). But the Fed has acknowledged the benefits of blockchain technology, and like other central banks around the world, has been experimenting with Central Bank Digital Currency (CBDC) through several initiatives.