The Federal Reserve’s top bank regulator is heading to Capitol Hill with a clear message: banks and crypto companies can work together — but everyone has to follow the rules.
Fed Governor Michelle Bowman is expected to tell Congress that the U.S. needs fresh rules for banks and stablecoin issuers. According to Bloomberg, she wants to support innovation but also make sure the financial system stays safe.
Bowman says it’s her job to encourage new ideas, but also to keep an eye on the risks that come with new technology. In her view, innovation can make banking faster, cheaper, and more open — but only if the right guardrails are in place.
A big part of her plan is to help set new standards for stablecoin companies under the recently passed Genius Act. This law forces stablecoin issuers to register properly and hold full reserves for every dollar they issue. In simple terms: if a company wants to act like a bank, it needs to be as responsible as one.
Her comments come at a time when banks and crypto firms are fighting over charters — the special licenses that let companies plug into the financial system. Crypto firms say charters would give them clearer rules. Banks worry that if charters are handed out too easily, some firms will get bank-like privileges without bank-level oversight.
Bowman also plans to update lawmakers on long-delayed capital reform efforts, including the Basel III Endgame rules. She says she wants these rules built from the ground up — not engineered to hit a preset number. The Fed is still adjusting extra capital requirements for the biggest banks and reviewing a softened version of a previous proposal.
In short, Bowman is trying to bring order to a crowded and fast-changing financial world. She’s telling both banks and crypto companies the same thing: innovation is welcome — but nobody gets to skip the hard work when it comes to safety, oversight, and capital.
