The new supervisor's policy orientation on banking access and stablecoin regulation will directly affect whether encryption companies can obtain basic banking services.
Written by: ChandlerZ, Foresight News
Recently, the U.S. Senate approved the nomination of Michelle Bowman as Vice Chair for Supervision of the Federal Reserve with a vote of 48 in favor and 46 against. The Republican from Kansas will succeed Michael Barr and take on the highest position in the Federal Reserve's regulatory area, directly responsible for overseeing stablecoin issuers and crypto-related institutions.
Michelle Bowman: From Board Member to Regulatory Head
Michelle Bowman was born and raised in Kansas, earning a Bachelor’s degree in Advertising and Journalism from the University of Kansas, as well as a Juris Doctor from Washburn University School of Law, and is a registered attorney in New York State. In her early years, she held several positions in the U.S. Congress, serving in Senator Bob Dole's office and as legal counsel for the House Committee on Transportation and Infrastructure and the Committee on Government Reform and Oversight. Since 2002, she has been part of the federal government's executive system, serving as the Director of Congressional and Government Affairs for the Federal Emergency Management Agency (FEMA), and later as Deputy Assistant Secretary and Policy Advisor at the Department of Homeland Security, providing policy support to the first Secretary of Homeland Security, Tom Ridge.
After working for the federal government, Bowman went to London to found and run a government and public affairs consulting firm, and then returned to her hometown in 2010 to join Farmers & Drovers Bank in Kansas, serving as vice president for seven years, gaining insight into the operational realities of community banking. In 2017, she was appointed as the Kansas Banking Commissioner, responsible for overseeing the state's banking institutions, and joined the Federal Reserve Board in 2018.
During her tenure at the Federal Reserve, Bowman was known for her focus on small and medium-sized banks and her emphasis on balancing regulation with innovation. She has repeatedly stressed the need to avoid using banking regulatory tools to achieve non-financial policy goals, calling for the maintenance of a robust banking system while encouraging innovation. As Vice Chair for Supervision, she will lead the regulatory policies for stablecoins, encryption assets, and fintech companies, and is seen as one of the key figures in the potential shift of the Federal Reserve's stance.
She has repeatedly questioned central bank digital currencies (CBDC) and warned about the risks that stablecoins may pose in the absence of clear regulations. During the hearing in April, Michelle did not clearly state her policy preferences regarding encryption assets.
The position of Vice Chair for Supervision at the Federal Reserve was established after the 2008 financial crisis, with the aim of separating the Federal Reserve's monetary policy and regulatory responsibilities. Upon taking office, Michelle will have direct influence over the access to encryption businesses, stablecoin regulations, and more. She also recently stated that the Federal Reserve will revise regulatory rules for the largest and most complex banks in the country, revealing that the Federal Reserve will soon launch several projects aimed at relaxing requirements and simplifying regulations, involving several regulatory areas that have long been criticized by the banking industry.
Or promote a shift in regulatory attitude
Against the backdrop of a generally warming regulatory environment for encryption in the United States, the Federal Reserve has remained the most cautious. Historically, the Federal Reserve, along with the OCC and FDIC of the Treasury Department, has restricted the channels through which crypto companies can obtain banking services. Even after the political environment has changed, the Federal Reserve still maintains a vigilant attitude towards cryptocurrencies.
Federal Reserve Chairman Powell previously stated that Congress should advance a "larger regulatory framework around encryption currencies" to address the potential risks of stablecoins. This cautious stance contrasts sharply with the more open attitude of other regulatory bodies. Although the Federal Reserve has recently eased some restrictions, the overall regulatory environment remains unclear.
In April, the Federal Reserve Committee announced that it would withdraw its previous guidance on banks' cryptoassets and USD token activities and adjust their expectations to ensure alignment with evolving risks while further supporting innovation in the banking system. Specific measures include the revocation of the 2022 Regulatory Letter, which no longer requires state member banks to notify cryptoasset activity in advance, and instead monitors through regular regulatory processes; Revocation of the 2023 Letter on the Regulatory Non-Objection Process for State Member Banks Engaging in U.S. Dollar Token Activities; Joined the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency to rescind two joint statements issued by federal banking regulators in 2023 regarding banks' cryptoasset activities and exposures.
Michelle Bowman has repeatedly stated in public that regulation should not be the reason for banks to "close their doors" to services. She believes that regulatory agencies should not use rules to exclude legitimate businesses from accessing financial services, especially not to serve unrelated policy goals. This statement directly addresses the long-standing dissatisfaction of the encryption industry with "de-banking."
At the confirmation hearing, Michelle committed to promoting a safe and sound banking system through a pragmatic regulatory approach, establishing a transparent and tailored banking regulatory framework to encourage innovation. This pragmatic and innovation-encouraging statement is not commonly seen under the strict regulatory style of her predecessor Michael Barr. From her current statements, her evidence-based regulatory approach is expected to improve bank access for encryption companies and introduce balanced regulation for stablecoins, contrasting with the Federal Reserve's previous cautious stance.
The policy shift is at a critical stage.
From the overall policy orientation of the Trump administration, Michelle's appointment is just part of the encryption-friendly policy. The Senate Agriculture Committee plans to consider Trump's nomination of Brian Quintenz to serve as chairman of the Commodity Futures Trading Commission on June 10.
But regulatory changes will take time, taking into account the attitudes of Congress and other regulators. U.S. stablecoin regulation is currently under the separate jurisdiction of multiple agencies, creating confusion and complexity. The GENIUS Act seeks to establish a federal framework while allowing state regulatory regulations to continue to exist. Republicans' efforts aim to limit the Fed's jurisdiction over stablecoin issuers, while Democrats advocate broader regulation, including for non-bank issuers. This inconsistency highlights the urgent need for a unified regulatory approach, and Bowman may play a key role in determining how effectively the Fed interacts with and guides the stablecoin market in this fragmented regulatory environment.
Overall, Michelle Bowman's appointment could indeed loosen the last hawkish stronghold of the Federal Reserve. With the overall encryption environment in the United States already quite friendly, a change in the Federal Reserve's stance could eliminate the last barrier to the industry's development. However, the specific policy effects still need to be observed based on her performance in actual work.
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The Federal Reserve welcomes a new regulatory chief, is the last hawkish bastion about to loosen?
Written by: ChandlerZ, Foresight News
Recently, the U.S. Senate approved the nomination of Michelle Bowman as Vice Chair for Supervision of the Federal Reserve with a vote of 48 in favor and 46 against. The Republican from Kansas will succeed Michael Barr and take on the highest position in the Federal Reserve's regulatory area, directly responsible for overseeing stablecoin issuers and crypto-related institutions.
Michelle Bowman: From Board Member to Regulatory Head
Michelle Bowman was born and raised in Kansas, earning a Bachelor’s degree in Advertising and Journalism from the University of Kansas, as well as a Juris Doctor from Washburn University School of Law, and is a registered attorney in New York State. In her early years, she held several positions in the U.S. Congress, serving in Senator Bob Dole's office and as legal counsel for the House Committee on Transportation and Infrastructure and the Committee on Government Reform and Oversight. Since 2002, she has been part of the federal government's executive system, serving as the Director of Congressional and Government Affairs for the Federal Emergency Management Agency (FEMA), and later as Deputy Assistant Secretary and Policy Advisor at the Department of Homeland Security, providing policy support to the first Secretary of Homeland Security, Tom Ridge.
After working for the federal government, Bowman went to London to found and run a government and public affairs consulting firm, and then returned to her hometown in 2010 to join Farmers & Drovers Bank in Kansas, serving as vice president for seven years, gaining insight into the operational realities of community banking. In 2017, she was appointed as the Kansas Banking Commissioner, responsible for overseeing the state's banking institutions, and joined the Federal Reserve Board in 2018.
During her tenure at the Federal Reserve, Bowman was known for her focus on small and medium-sized banks and her emphasis on balancing regulation with innovation. She has repeatedly stressed the need to avoid using banking regulatory tools to achieve non-financial policy goals, calling for the maintenance of a robust banking system while encouraging innovation. As Vice Chair for Supervision, she will lead the regulatory policies for stablecoins, encryption assets, and fintech companies, and is seen as one of the key figures in the potential shift of the Federal Reserve's stance.
She has repeatedly questioned central bank digital currencies (CBDC) and warned about the risks that stablecoins may pose in the absence of clear regulations. During the hearing in April, Michelle did not clearly state her policy preferences regarding encryption assets.
The position of Vice Chair for Supervision at the Federal Reserve was established after the 2008 financial crisis, with the aim of separating the Federal Reserve's monetary policy and regulatory responsibilities. Upon taking office, Michelle will have direct influence over the access to encryption businesses, stablecoin regulations, and more. She also recently stated that the Federal Reserve will revise regulatory rules for the largest and most complex banks in the country, revealing that the Federal Reserve will soon launch several projects aimed at relaxing requirements and simplifying regulations, involving several regulatory areas that have long been criticized by the banking industry.
Or promote a shift in regulatory attitude
Against the backdrop of a generally warming regulatory environment for encryption in the United States, the Federal Reserve has remained the most cautious. Historically, the Federal Reserve, along with the OCC and FDIC of the Treasury Department, has restricted the channels through which crypto companies can obtain banking services. Even after the political environment has changed, the Federal Reserve still maintains a vigilant attitude towards cryptocurrencies.
Federal Reserve Chairman Powell previously stated that Congress should advance a "larger regulatory framework around encryption currencies" to address the potential risks of stablecoins. This cautious stance contrasts sharply with the more open attitude of other regulatory bodies. Although the Federal Reserve has recently eased some restrictions, the overall regulatory environment remains unclear.
In April, the Federal Reserve Committee announced that it would withdraw its previous guidance on banks' cryptoassets and USD token activities and adjust their expectations to ensure alignment with evolving risks while further supporting innovation in the banking system. Specific measures include the revocation of the 2022 Regulatory Letter, which no longer requires state member banks to notify cryptoasset activity in advance, and instead monitors through regular regulatory processes; Revocation of the 2023 Letter on the Regulatory Non-Objection Process for State Member Banks Engaging in U.S. Dollar Token Activities; Joined the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency to rescind two joint statements issued by federal banking regulators in 2023 regarding banks' cryptoasset activities and exposures.
Michelle Bowman has repeatedly stated in public that regulation should not be the reason for banks to "close their doors" to services. She believes that regulatory agencies should not use rules to exclude legitimate businesses from accessing financial services, especially not to serve unrelated policy goals. This statement directly addresses the long-standing dissatisfaction of the encryption industry with "de-banking."
At the confirmation hearing, Michelle committed to promoting a safe and sound banking system through a pragmatic regulatory approach, establishing a transparent and tailored banking regulatory framework to encourage innovation. This pragmatic and innovation-encouraging statement is not commonly seen under the strict regulatory style of her predecessor Michael Barr. From her current statements, her evidence-based regulatory approach is expected to improve bank access for encryption companies and introduce balanced regulation for stablecoins, contrasting with the Federal Reserve's previous cautious stance.
The policy shift is at a critical stage.
From the overall policy orientation of the Trump administration, Michelle's appointment is just part of the encryption-friendly policy. The Senate Agriculture Committee plans to consider Trump's nomination of Brian Quintenz to serve as chairman of the Commodity Futures Trading Commission on June 10.
But regulatory changes will take time, taking into account the attitudes of Congress and other regulators. U.S. stablecoin regulation is currently under the separate jurisdiction of multiple agencies, creating confusion and complexity. The GENIUS Act seeks to establish a federal framework while allowing state regulatory regulations to continue to exist. Republicans' efforts aim to limit the Fed's jurisdiction over stablecoin issuers, while Democrats advocate broader regulation, including for non-bank issuers. This inconsistency highlights the urgent need for a unified regulatory approach, and Bowman may play a key role in determining how effectively the Fed interacts with and guides the stablecoin market in this fragmented regulatory environment.
Overall, Michelle Bowman's appointment could indeed loosen the last hawkish stronghold of the Federal Reserve. With the overall encryption environment in the United States already quite friendly, a change in the Federal Reserve's stance could eliminate the last barrier to the industry's development. However, the specific policy effects still need to be observed based on her performance in actual work.