Michelle Bowman, the Federal Reserve’s Vice Chair for Supervision, stated that the central bank’s staff should be allowed to own a small amount of cryptocurrency.
Speaking at a blockchain conference in Wyoming, she argued that direct use of digital assets would give employees a better understanding of how the technology works.
Bowman explained that supervisors will set rules for companies that issue these assets. She said reading about blockchain is not enough, and that hands-on experience is the best way to learn how ownership and transfers function.
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Currently, Federal employees and their spouses are banned from holding cryptocurrency, exchange-traded products linked to cryptocurrency, or shares in cryptocurrency-focused firms. Bowman noted that this restriction creates problems, including difficulty hiring and keeping examiners with the right knowledge.
She warned that the rules may prevent staff from acquiring the necessary skills to effectively oversee the crypto industry.
Her remarks also challenged what she called the “overly cautious mindset” of bank regulators. She encouraged officials to see the value of adopting new technology, instead of treating them only as risks.
Bowman argued that regulators face a choice: help shape new systems with safety and efficiency in mind, or watch them develop outside the banking sector. She said that while new technology brings risks, those risks can be managed once the benefits are fully considered.
Meanwhile, US Securities and Exchange Commission (SEC) Chair Paul Atkins shared his views on how the agency plans to handle digital assets going forward at the same conference. What did he say? Read the full story.
