The first person responsible for the Federal Reserve regulation claims that the staff of the American central bank should be authorized to invest a small amount in the crypto to help them understand the technology.
The vice-president of supervision of supervision, Michelle Bowman, said on Tuesday during a blockchain event in Wyoming that the regulator should consider allowing her staff “to contain minimus quantities of crypto or other types of digital assets so that they can obtain an understanding of operating the underlying functionality”.
“We will soon establish a framework to supervise the issuers of these assets,” she added.
“There is no replacement to experiment and understand how this process of property and transfer circulates.”
Currently, most of the Fed and their spouses are prohibited from having crypto or products that focus on crypto, such as fundraising funds or stocks in crypto companies.
The Fed strengthened its rules on all investments at the beginning of 2022 after having revealed that three senior officials had an unusual negotiation activity in 2020, while the regulator took measures to support the American economy at the start of the Pandemic COVID-19.
Allowing crypto could help recruitment, regulations
Bowman said that Fed staff investment restrictions “could be an obstacle to recruitment and retention of examiners with the necessary expertise” and that the rules would help existing staff to better understand technology.
“I certainly would not trust someone to teach me to ski if they never put skis, regardless of the number of books and articles they have read, or even wrote about it.”
Bowman urges not to “stay motionless”
In his speech, Bowman said that the bank’s regulators had an “too cautious state of mind” and urged them to be less skeptical of new financial products and to “recognize the usefulness and the need to adopt technology in the traditional financial sector”.
She said that some bankers fear that blockchain technology threatens traditional trade models, but that technology could “change the banking system, whatever the way banks and regulators choose to respond”.
“We must choose to adopt the change and help shape a framework that will be reliable and durable – guarantee safety and solidity and incorporate the advantages of efficiency and speed – or to remain motionless and allow new technologies to completely bypass the traditional banking system,” she added.
“From the point of view of a regulator, the choice is clear.”
In relation: New Crypto Advocacy Group made its debut at Wyoming Summit
Bowman said that she had recognized the risks of adoption of new technologies, but these could be offset or “at least determined to be manageable when we recognize and consider the potentially extensive advantages of new technologies”.
Trump’s cryptocurrency thrust
Bowman did not specify the types of cryptographic products or what amounts it would suggest that the Fed will allow, but its comments are the last convivial remarks by the crypto.
On Friday, the Fed said that it would end a supervision program for activities related to cryptography and blockchain undertaken by Banks, which the Biden administration created in 2023.
Trump also signed an executive decree earlier this month, ordering banking regulators to investigate the speaking allegations formulated by the cryptography sector and the conservatives.
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