Fed Vice Chair Michelle Bowman proposed changes in the regulatory approach to cryptocurrencies, highlighting the importance of practical experience.
Proposal for Crypto Literacy
At the Wyoming Blockchain Symposium, Michelle Bowman urged bank regulators to drop their 'overly cautious mindset' towards digital assets. She suggested that Fed staff could hold limited amounts of crypto to better understand what they are regulating. Bowman drew a vivid analogy, likening crypto literacy to learning how to ski, stating, 'I wouldn’t trust someone to teach me to ski if they’d never put on skis.' This could aid in hiring skilled examiners and improving the current practice.
GENIUS Act and Regulatory Standards
Bowman is also taking a leading role in shaping rules under the newly enacted GENIUS Act, which sets clear licensing, reserve, and oversight standards for stablecoin issuers. The law, signed in July, requires that stablecoins be backed by highly liquid assets. This week, the Treasury gained momentum by issuing a public request for comment, emphasizing a swift move towards finalizing the new regulatory framework.
Cultural Changes at the Fed
Bowman's ascent reflects a broader cultural reset at the Fed under a Trump-aligned policy environment. Since her nomination in March and confirmation in June, the central bank has unwound several prior restrictions on crypto. The White House is also highlighting a friendlier stance towards cryptocurrencies, evident during the Wyoming Blockchain Symposium.
Similar to crypto literacy, Bowman's new proposal highlights a shift in the Fed's approach to digital assets and their integration into the financial system, alongside the GENIUS Act, which may reshape the regulatory landscape.
