Fed warns of a 'turning point' in financial technology innovation

Michelle Bowman, the Vice Chair for Supervision of the U.S. Federal Reserve (Fed), believes that the Fed is at a 'turning point' decision: either seize the opportunity to shape the future or face the risk of falling behind. Speaking at the Wyoming Blockchain Symposium, she urged banks and regulators to be more open to new technologies rather than maintain an overly cautious mindset.

Bowman, appointed by President Donald Trump, emphasized that technologies like AI and blockchain could bring significant benefits to the banking system, contributing to enhanced safety and financial stability. She also compared Fed employees who do not directly interact with crypto but supervise this technology to 'a ski instructor who has never skied.' Therefore, Bowman suggested that the Fed should consider allowing employees to hold a small amount of crypto to gain practical experience and enhance their expertise.

This statement comes amid the Fed's recent easing of regulations for banks participating in crypto and stablecoins, as well as ending some oversight programs deemed to hinder innovation in the digital finance sector.