Digital ledger technology, stablecoins, and AI-driven trading algorithms are transforming financial markets at an "unprecedented pace" and could fundamentally alter how the U.S. dollar functions in the global economy, according to remarks delivered June 22, 2026 by Lisa Chung, Head of Domestic and International Markets at the Federal Reserve Bank of New York. Speaking at the Fifth Conference on the International Roles of the U.S. Dollar in Washington, D.C., Chung said technological innovations are already moving beyond experiments into real market use, with stablecoins "now being used in markets and not just tested in experiments." The speech highlights how rapid structural changes—including 24/7 trading, atomic settlement capabilities, and blockchain-based markets—are forcing the Fed's Open Market Trading Desk to rethink how it implements monetary policy and supports the dollar's central role in global finance.

Chung identified several structural shifts already underway in financial markets. Digital assets have evolved dramatically since the inaugural dollar conference in 2022, when they were "primarily used for retail speculation with a limited cross-border scope"—just four years later, institutional adoption is accelerating with a wider range of use cases. AI-driven algorithms are becoming prevalent and providing new trade execution methods, while atomic settlement capabilities are increasing trading efficiencies. The speech noted that blockchain-based markets and emerging payment rails are creating new infrastructure that sits alongside traditional financial systems, with competitive pressures driving innovation across the industry.

According to Chung, these changes matter because the dollar's international roles rest on fundamental pillars including "the size and strength of the U.S. economy, U.S. price stability, deep and well-functioning financial markets, and a reliable payment infrastructure." The Federal Reserve supports those roles through its monetary policy framework, which provides an ample supply of dollar reserves to maintain rate control and smooth market functioning, and through international facilities like central bank swap lines that ensure well-functioning dollar funding markets globally. The speech warned that "the technological evolution that we are observing today can affect this foundation," forcing policymakers to ask whether changes in payment technology alter the dollar's international reach, how shortened settlement cycles impact demand for safe assets, and whether markets are heading toward greater fragmentation.

The New York Fed's trading desk is preparing through three strategies, Chung explained. First, it monitors developments through daily interactions with banks, nonbanks, financial platforms, and new market entrants to stay ahead of structural changes. Second, it experiments through the New York Innovation Center, which has conducted hands-on projects including Project Cedar on tokenization's market impacts and Project Pine on smart contract tools for monetary policy in tokenized environments—the Fed is also participating in Project Agora, a public-private collaboration exploring tokenization for wholesale cross-border payments. Third, the Fed convenes forums including advisory groups and conferences to build understanding cooperatively. Chung framed the approach as "not just reacting to the moment but also anticipating the future," emphasizing that innovations require deliberate questions about how they affect price discovery dynamics, dollar liquidity provision, and cross-market connections. The bottom line: as financial infrastructure transforms, the Fed's commitment to price stability and effective monetary policy implementation must adapt to preserve the pillars supporting the dollar's global role.