Crypto Goes Mainstream

Thank you for the opportunity to speak to you today. It is an honor and a pleasure to be here with you in Singapore, a crossroads for global trade and finance, to discuss the transformational nature of artificial intelligence (AI). Like other central banks around the world, including the Monetary Authority of Singapore, we at the Federal Reserve have been exploring the use of AI in our operations for quite some time as well as considering the implications of AI's adoption for the financial sector and the broader economy. At the Fed, we've been interested in the effects of AI on the economy and its role in the financial system for decades. Remarkably, in 1997, Governor Susan Phillips delivered a speech noting the use of AI in consumer loan underwriting. In the past year, no fewer than seven speeches by Fed Governors have had "AI" in the title. Today I'll discuss the opportunities presented by AI relevant for central bankers as well as the risks it may pose that policymakers should consider. I will leave you with three main takeaways. The State of AI Innovation and Deployment My first main point is that while AI is a big deal that will transform economies, there are a range of outcomes for how it could do so. AI—algorithms that mimic human thought, communication, and choices—has been with us for decades, but AI entered a new era with the launch of ChatGPT in late 2022. Generative AI (GenAI) captured our imagination with convincing conversations in which it is possible to go deep on a wide range of topics. Earlier forms of AI were often the bailiwick of digitally native companies, but GenAI is spreading rapidly through the economy. As of 2024, three in four large companies FED'S BARR DOES NOT COMMENT ON MONETARY POLICY, ECONOMIC OUTLOOK IN PREPARED REMARKS ON ARTIFICIAL INTELLIGENCE IN SINGAPORE