Federal Reserve's Bowman Signals Crypto Regulatory Shift as Stablecoin Rules Advance
Federal Reserve Vice Chair Michelle Bowman told lawmakers this week that banking regulators are working to provide clearer rules for digital assets, offering another signal that federal oversight of cryptocurrency is shifting toward integration rather than exclusion.
Appearing before the House Financial Services Committee, Bowman said the Federal Reserve, FDIC, and other regulators are developing rules required under the GENIUS Act, the 2025 law that created the first federal framework governing payment stablecoins. The law established standards for reserves, liquidity, and supervision while giving stablecoin issuers a defined regulatory pathway.
Bowman also emphasized that banks need greater clarity regarding permissible digital-asset activities and suggested regulators should avoid unnecessarily restricting innovation. Her comments align with previous speeches calling for a supervisory framework that accommodates blockchain technology while maintaining safety and soundness standards.
One of the most closely watched elements of her testimony involved Kraken’s limited-purpose Federal Reserve account. Bowman described the arrangement as a controlled opportunity to observe how digital-asset firms might interact with payment infrastructure under regulatory supervision.
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The hearing reflects a broader transformation in U.S. crypto policy.
For years, major crypto firms argued that regulatory uncertainty and banking restrictions limited growth. Congress responded in 2025 with the GENIUS Act, which became the first major federal law establishing rules for stablecoins. The legislation passed with bipartisan support and marked a turning point in federal treatment of digital assets.
Supporters see Bowman’s approach as evidence that regulators are moving toward clearer and more predictable oversight. Critics, including some lawmakers and banking-policy advocates, continue to argue that loosening supervision could increase financial-system risks if innovation outpaces safeguards.
The next major test will come when regulators release the detailed rules implementing the GENIUS Act’s stablecoin requirements. Those regulations will determine how much of the crypto industry’s recent optimism translates into practical access to the U.S. banking system.
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