{
  "id": 5319956,
  "title": "Jackson Hole: Exploring the Financial Frontier",
  "url": "https://urgent.news/2026/09/03/jackson-hole-exploring-the-financial-frontier",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-03T11:00:00.000Z",
  "source": {
    "name": "Liberty Street Economics",
    "slug": "liberty-street-economics",
    "url": "https://libertystreeteconomics.newyorkfed.org/2026/09/jackson-hole-exploring-the-financial-frontier/"
  },
  "original_language": "en",
  "account": "After two days of insightful discussions with scholars and policymakers from around the globe at the annual Kansas City Fed symposium in Jackson Hole, Wyoming, I am now returning to everyday life. The primary focus of this year's gathering was on financial innovation in the payments sector—a rapidly developing area with significant consequences for both consumers and central banks. Here, I will share some general observations from those Jackson Hole discussions and delve into related research from the New York Fed on payments and financial intermediation.\n\nNumerous conversations at Jackson Hole revolved around technological advancements that are enabling direct transactions between parties, bypassing the need for traditional intermediaries to coordinate those exchanges. Central banks have historically played a crucial role in providing this \"hub\" and the rules governing many payments. Consequently, we at the Federal Reserve are deeply interested in the implications of these changes for ourselves, as payment processors, as well as the potential risks to the payments system itself and the broader financial ecosystem.\n\nParticipants showcased examples demonstrating that certain aspects of blockchain technology should undoubtedly be embraced, as they pave the way for so-called \"smart contracts\"—more complex payment arrangements that can be triggered based on relevant circumstances between the parties involved. However, some of the papers presented were more circumspect in assessing the implications of such innovations for banks and other non-bank financial institutions (NBFIs), as well as consumer well-being.\n\nRather than focusing on the conference presentations, I wish to emphasize the work undertaken by our team at the New York Federal Reserve in the broader field of \"financial intermediation.\" This research is crucial for understanding the questions raised at Jackson Hole. When considering new payment technologies, it is helpful to remember the fundamental purpose of the financial system: to enable individuals and entities to concentrate their purchasing power on desired goods and services at specific times and circumstances. This objective is achieved through borrowing, lending, and insurance contracts, among other mechanisms. Crucially, all these desired outcomes ultimately depend on efficient payment systems for their execution. It is evident that any financial system that fails to accomplish this adequately is not fully serving society's needs.\n\nTraditionally, banks and, increasingly, NBFIs have carried out these functions through financial intermediation: collecting deposits from savers and lending those funds to borrowers. As intermediaries, these institutions accumulate substantial information regarding credit risks, economic conditions, and financial markets. Ideally, this advantage enables them to channel available credit to where it is needed most. Payments represent a natural extension of this core activity—when two individuals hold accounts at the same bank or NBFI, it becomes straightforward for them to pay one another through that institution. Even if they do not share a bank or NBFI, these entities can establish a network to facilitate the movement of claims, allowing consumers to conduct payments.\n\nBlockchain technology holds the potential to revolutionize banking, with distributed digital ledgers and tokenized deposits replacing conventional databases. Proponents argue that blockchain-based banking could offer numerous advantages, most notably real-time transactions, heightened security, and reduced operational costs. The nature of information required by market participants to safely execute payments is also evolving. Currently, a substantial amount of data is exchanged prior to payment execution, which takes valuable time, effort, and resources. To what extent can emerging payment technologies help alleviate these burdens? Economists at the New York Fed have examined these potential benefits in a series of Liberty Street Economics posts, assessing the promise of permissionless blockchain payment systems and the potential for interoperability across blockchain payment systems.",
  "summary": "After two days of heady discussions with academics and policymakers from around the world in high-altitude Jackson Hole, Wyoming, I’m now decompressing back at Street Level . The main theme of this year’s Kansas City Fed symposium was financial innovation in the payments space—a fast-evolving topic with major implications for consumers and central bankers alike. In this post, I’ll share some…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}