U.S. Federal Reserve’s New Supervision Chief Sold on Bringing Crypto to Finance
The Federal Reserve’s recently sworn-in vice chair for supervision, Michelle Bowman, thinks the banking regulator needs to abandon an “overly cautious mindset” in adopting new rules for the crypto industry.
Bowman will be a leading voice in writing regulations based on the new stablecoin law, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
She also suggested Fed employees should be allowed to hold limited amounts of crypto assets.
The U.S. Federal Reserve’s newest vice chair who supervises Wall Street banking, Michelle Bowman, made a crypto speech on Tuesday that could have been uttered by one of the industry’s own policy wonks, advocating that banks get behind the digital assets surge and that the Fed give the sector rules that won’t get in crypto’s way.
At the Wyoming Blockchain Symposium, Bowman warned banks that don’t embrace the shift toward crypto “will play a diminished role in the financial system more broadly,” and she further underlined what’s already been an obvious change in crypto sentiment from U.S. banking regulators.
“Your industry has already experienced significant frictions with bank regulators applying unclear standards, conflicting guidance, and inconsistent regulatory interpretations,” she said. “We need a clear, strategic regulatory framework that will facilitate the adoption of new technology, recognizing that in some cases, it may be inadequate and inappropriate to apply existing regulatory guidance to address emerging tech.”
In March, President Donald Trump nominated Bowman to be elevated from a board seat to the role of vice chair for supervision, and she was sworn in about two months ago. She’ll occupy a leading role in the Fed’s writing and adoption of rules for stablecoins, as outlined by the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, and her latest remarks show how much she’s aligned with the president on fostering the technology.
“Regulators must recognize the unique features of these new assets and distinguish them from traditional financial instruments or banking products,” Bowman said, advocating that the pending rules be closely tailored to what the industry is doing and not a “worst-case scenario.”
Bowman addressed asset tokenization, saying it can make transfers of ownership faster, mitigate “well-known risks” and make the process cheaper, and she said stablecoins are “positioned to become a fixture in the financial system.”
“It is essential that banks and regulators are open to engaging in new technologies and departing from an overly cautious mindset,” she said.
Read more on freedomsphoenix.com
