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Bowman from the Fed calls for blockchain adoption in the banking system
Federal Reserve Vice Chair Michelle W. Bowman urged regulators to integrate blockchain technology and digital assets into the banking system during her remarks at the Wyoming Blockchain Symposium 2025 on Tuesday.
Bowman described the current moment as "the beginning of what feels like a seismic shift" in our understanding of money and financial systems, comparing blockchain’s potential impact to past transformations such as industrialization and the internet.
She highlighted several promising developments in the banking sector, including asset tokenization, which can address challenges of transferring ownership rights by enabling faster transactions without changing custodians or moving physical securities.
"Tokenized assets allow ownership to be transferred without changing the custodian or moving physical securities or assets," Bowman said, noting that while many banks have started developing this technology, broad adoption has yet to occur.
The Fed Vice Chair also discussed the recent passage of the GENIUS Act, which positions stablecoins as "a permanent feature of the financial system" with the potential to disrupt traditional payment channels. Banking agencies are now working on creating a regulatory framework for stablecoins.
Bowman acknowledged that regulators have historically approached new technologies with "caution and skepticism," but emphasized that this mindset must change. She announced that the Federal Reserve will no longer consider "reputational risk" in its supervisory process, aiming to address the problem of "debanking" in the digital asset space.
"We must adopt an approach that does not punish or prohibit a bank from serving a customer engaged in lawful activity," she said.
Looking ahead, Bowman outlined the principles of an adapted regulatory framework for blockchain and digital assets, including regulatory clarity, well-calibrated rules, compliance with consumer protection laws, and maintaining America’s competitiveness in innovation.
She also suggested allowing Federal Reserve employees to own small amounts of cryptocurrency to better understand the technology, comparing it to learning to ski: "I certainly wouldn’t trust someone to teach skiing who had never worn skis."
Bowman concluded her remarks by characterizing the present moment as a crossroads where regulators must "either seize the opportunity to shape the future or risk being left behind."
See also: "South Korea to Introduce New Stablecoin Legislation in October"
