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There is little question that the delivery of financial services is in
the process of radical transformation and that banking options we once thought
to be science fiction could quickly become fact. But, while these developments
grab our attention and stimulate the imagination, we should not lose sight
of the fact that for any emerging payments technology to achieve long-term
success, it must achieve three principal goals: It must maintain high levels
of integrity, accessibility and efficiency. This has remained true throughout
history. Integrity means keeping risk in the system at a minimum, as well as maintaining reliability
and broad public confidence in the system's workings. Accessibility means making the payments system conveniently available through one or
more providers, regardless of the income or socio-economic status of the
user. Efficiency means ensuring transaction speed, encouraging innovation and demanding
cost-effectiveness.
 As today's payments system transforms itself, it won't always be easy to
judge the value of a particular change, because its impact may not be exclusively
positive or negative. In general, however, if a change leads to less risk,
greater efficiency and broader accessibility, it will be good for the U.S.
economy. If it increases risk, limits access or makes the system less reliable,
it could threaten economic expansion and stability. The system that will
be best for the U.S. economy will evolve from many ideas and many sources
in a competitive, free-market environment. It will take action, involvement,
collaboration, research, problem-solving and many forms of leadership from
many different organizations.
As a central bank dedicated to the principles of free markets and private
enterprise, the Federal Reserve has a responsibility to let market forces,
by and large, shape and determine change in the payments system. Even so,
at times the Fed may encourage developments that promote the public welfare
or discourage others that aren't in the public's best interest. It will
protect the public's confidence in the payments system by participating
as a provider of certain services and by supervising and regulating various
participants, but, most importantly, by exercising leadership. The Federal
Reserve will share its knowledge and use its unique position to encourage
participants to work together in the interest of maximizing the nation's
economic welfare.
Today's payments system is a complex set of instruments, processing infrastructures,
laws, rules and account-holding institutions. Tomorrow's system will provide
more choices, be more high tech and be more complex. If we focus on the
long-term goals of an efficient, accessible and secure payments system,
our nation will reap tremendous economic rewards.
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