In her official comments at the Wyoming Blockchain Symposium, Michelle Bowman said that regulators should allow innovation to flourish in ways that strengthen financial services.
She highlighted that banking regulators are already taking important steps to create a framework for digital assets and the adoption of blockchain in the banking system. She assured that these measures will expand access to banking services and eliminate the supervisory obstacles that have hindered relationships between banks and innovators. Bowman added that she feels encouraged by the technology's ability to solve problems and improve financial efficiency.
Bowman warned that an overly cautious approach could leave banks behind as consumers and businesses adopt faster, cheaper, and more efficient alternatives. She stated that the Federal Reserve is committed to changing its culture towards openness, emphasizing that outdated frameworks should not block new products and services.
Another part of her message focused on the growing importance of tokenization. Michelle Bowman stated that tokenized assets could transform ownership transfers, reduce costs, and expand access to capital markets. She added that banks, including community banks, would benefit from near real-time transactions made possible through tokenization.
Bowman also highlighted the role of stablecoins following the passage of the GENIUS Act. She indicated that they could help expand the payment systems available to banks. According to Bowman, regulators must ensure that the rules governing stablecoins are clear, fair, and tailored to real risks.
Michelle Bowman also advocated for a balanced approach to AI oversight. Artificial intelligence was also a topic of discussion.
She indicated that AI would allow banks to better detect fraud, manage risk, and provide better customer service. However, she added that AI can create new risks, making balanced oversight necessary. This change removes the barriers that have prevented banks from interacting with digital asset companies.
Bowman cited a recent conversation with Sam Altman, CEO of OpenAI. She noted that the dual use of technology (protecting and exploiting financial systems) requires regulators to remain actively engaged.
Furthermore, Bowman announced a significant policy shift regarding 'reputational risk.' She confirmed that the Federal Reserve will no longer allow examiners to penalize banks for providing services to legal businesses based on subjective concerns. She added that this change will eliminate the barriers that have prevented banks from interacting with digital asset companies.
Michelle Bowman called for ongoing dialogue between regulators, banks, and technology developers to ensure that innovation strengthens the country's financial system.
