Fed’s Bowman: Regulators shouldn’t hinder crypto innovation

Jan. 11, 2023

Federal Reserve Governor Michelle Bowman said that while crypto-assets can pose significant risks to consumers and the financial system, regulators should avoid hindering innovation.

Crypto Approach: Addressing the Florida Bankers Association, Bowman said inhibiting innovation could push growth into the nonbank sector, leading to less transparency and potential financial stability risk. “As regulators, we should support innovation and recognize that the banking industry must evolve to meet consumer demand,” Bowman said.

CBDC and FedNow: Bowman also said that while the Fed continues to study the idea of a U.S. central bank digital currency, “much of what supporters hope to achieve with a central bank digital currency may be provided through FedNow and existing private payment services.”

ICBA Position: ICBA opposes the creation of a U.S. CBDC and is calling on policymakers to ensure the traditional banking system continues to be a safe haven from the crypto sector’s instability. Meanwhile, ICBA Bancard tomorrow is hosting a webinar on FedNow use cases.