At the 2026 Jackson Hole Economic Policy Symposium, Professor Itay Goldstein joined leading economists and policymakers for a discussion on how financial innovation is reshaping banking and payments.
Professor Goldstein served as discussant for “Stablecoin Risk,” a paper by Christine Parlour, Uday Rajan, and Haoxiang Zhu examining how a shift from bank-intermediated payments to stablecoins could transform the financial system. Drawing on his own research, Professor Goldstein considered how banks might respond to the rise of stablecoins, what these changes could mean for liquidity transformation and financial information, and the broader risks associated with digital currencies.
Below, Professor Goldstein reflects on his discussion and experience at Jackson Hole.
It was a privilege to speak in this year’s Jackson Hole Economic Policy Symposium and contribute to the important discussion about how innovation is reshaping finance and payments.
Discussing “Stablecoin Risk,” a thought-provoking paper by Christine Parlour, Uday Rajan, and Haoxiang Zhu, I provided a review on the traditional role of banks and the potential of stablecoins to crowd them out.
These are topics I have been thinking a lot about in recent years that tie into different strands of my research. Based on this, I discussed a few things that should be considered going forward, such as:
- What kind of equilibrium should we expect? Will banks and stablecoins coexist? Will banks maintain dominance?
- Were digital currencies just a catalyst for banks to adopt new technologies, or will they play a central role going forward?
- What will happen to liquidity transformation? Is the demand for it too strong to ignore?
- How will the information environment change? Will the abundance of new data sources overcome the reduction in bank-generated information?
- How should we weigh all the risks surfacing up from the use of digital currencies and stablecoins?
Thank you to the Federal Reserve Bank of Kansas City for the invitation and for bringing together such a thoughtful group for this discussion. Not only were the discussions in the room stimulating, but the ample activities around the event allowed for further interactions, making this experience truly memorable.
It was an honor to contribute to such an important forum for economic and financial policy.
Here is the program for the forum.
My slides from the session are posted here.
Learn more about Professor Itay Goldstein.
Watch a conversation about stablecoins between Professor Goldstein and Heath Tarbert, President of Circle, on the Future of Finance Podcast.