Kevin Dietsch
Federal Reserve Vice Chair for Supervision Michael Barr laid out on Tuesday the economic risks and benefits of artificial intelligence, saying such technology “might” be able to significantly boost productivity for the global economy.
Barr noted the use of AI in algorithmic trading can “generate benefits in terms of efficiencies, but also risks in terms of fairness” and market manipulation, he said at the annual DC Fintech Week event.
Among the downsides of generative AI includes “significant economic dislocations that might affect how people do work,” he said. Ultimately, he added, the technology could change the composition of the labor force.
Elsewhere in the wide-ranging forum, Barr believes that a stablecoin, whose value is pegged to a fiat currency, “needs to be well regulated.”
Historically speaking, “private money,” which Barr said in reference to stablecoins, “can cause significant risks in the financial system,” as it “borrows the trust of the Federal Reserve system.”