In a striking declaration at the Wyoming Blockchain Symposium on Tuesday, Michelle Bowman, the U.S. Federal Reserve’s newest vice chair for supervision, urged banks to embrace the digital assets wave or risk obsolescence. This bold stance signals a renewed fervor among U.S. banking regulators towards cryptocurrency integration, marking a distinct shift from previous ambivalence.
An Advocate for Change
Bowman’s speech was not just a call to action—it was a rallying cry for the financial sector to align itself with the burgeoning world of digital assets. “Banks that don’t adapt to the crypto surge will play a diminished role in the financial system more broadly,” she warned. Her comments reflect a broader shift in sentiment from U.S. banking regulators, who have historically been cautious, if not skeptical, of the crypto revolution.
She highlighted the friction that the industry has experienced with regulators in the past, dealing with “unclear standards, conflicting guidance, and inconsistent regulatory interpretations.” Her solution? A strategic regulatory framework tailored to the unique nature of digital assets. “In some cases, it may be inadequate and inappropriate to apply existing regulatory guidance to address emerging tech,” Bowman noted, advocating for rules that fit the industry’s distinct needs rather than a one-size-fits-all approach.
The GENIUS Act and Stablecoin Strategy
Sworn in just two months ago, Bowman is set to play a pivotal role in shaping the Fed’s policy on stablecoins, as outlined by the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Her alignment with President Trump’s pro-innovation stance is evident, as she pushes for regulations that recognize the “unique features” of digital assets. “The pending rules should be closely tailored to what the industry is doing and not a ‘worst-case scenario,'” she emphasized. This aligns with recent moves in the industry, such as Tether tapping Trump’s ex-crypto council chief for US stablecoin push, highlighting the growing importance of stablecoin regulation.
Bowman’s insights into asset tokenization point to a future where the transfer of ownership is faster, risks are mitigated, and processes are cheaper—a trinity of benefits that could revolutionize financial systems. Stablecoins, she argued, are “positioned to become a fixture in the financial system,” a sentiment that resonates with many in the crypto community who see stablecoins as a bridge between traditional finance and the digital frontier. This is further evidenced by Paxos following Circle and Ripple in applying for a US banking license, indicating a trend towards integrating stablecoins within the traditional banking framework.
A Vision for the Future
In a somewhat unconventional suggestion, Bowman proposed that Federal Reserve staff should hold small amounts of crypto to gain firsthand understanding of its functionality. “I certainly wouldn’t trust someone to teach me to ski if they’d never put on skis,” she quipped, underscoring the importance of practical experience over theoretical knowledge.
This perspective is a refreshing departure from the often cautious approach regulators have taken towards cryptocurrencies. By advocating for engagement with new technologies, Bowman is essentially calling for a cultural shift within regulatory bodies—one that embraces innovation rather than stifles it.
Looking Ahead
As the crypto landscape continues to evolve, Bowman’s remarks raise important questions about the future of regulation and innovation in the financial sector. Will the Fed’s new direction under her guidance lead to a more crypto-friendly regulatory environment? And if so, how quickly can these changes be implemented without compromising the stability of the financial system?
What is clear is that the conversation around digital assets is becoming increasingly mainstream, with influential figures like Bowman leading the charge. This could herald a new era for the financial industry, one where digital assets are not just an afterthought but a central pillar.
For now, the crypto community and financial institutions alike will be watching closely to see how these proposals unfold. Bowman’s vision—if realized—could redefine the relationship between traditional finance and the digital asset ecosystem, paving the way for a more integrated and innovative financial landscape.
Source
This article is based on: U.S. Federal Reserve’s New Supervision Chief Sold on Bringing Crypto to Finance
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
