The Federal Reserve’s top banking regulator is heading to Capitol Hill with a clear message: traditional banks and crypto firms can coexist — but only under stronger, enforceable rules.
Federal Reserve Governor Michelle Bowman will urge Congress to back tougher oversight for both banks and stablecoin issuers as she testifies before the House Financial Services Committee, according to Bloomberg. Her goal: promote innovation while safeguarding the financial system.
In her prepared remarks, Bowman argues that innovation in banking and digital assets should be encouraged — but only with robust supervision. She notes that emerging technologies can expand access to credit and make banking more efficient, but they also introduce new risks that regulators must monitor closely.
Bowman will press lawmakers to support a new framework that strengthens capital and diversification standards for stablecoin issuers as required under the newly enacted Genius Act. The law forces stablecoin companies to register formally and maintain one-to-one reserves, effectively bringing them closer to the regulatory expectations applied to traditional financial institutions.
Bowman’s comments come amid a growing power struggle between established banks and fast-moving crypto firms over charters, which grant access to the U.S. financial system. Crypto companies argue charters would give them regulatory clarity, while banks warn that handing them out too easily could create “lightly supervised banks” operating under different standards.
Bowman is also set to brief Congress on long-delayed capital reform efforts, including progress on the Basel III Endgame overhaul. She emphasized that the Fed is prioritizing a “bottom-up” approach, fine-tuning capital requirements rather than forcing banks to meet arbitrary targets. The central bank is currently adjusting surcharges for major lenders and reviewing a softened version of earlier proposals.
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