As Vice Chair for Supervision at the Federal Reserve, I recently spoke at the Wyoming Blockchain Symposium 2025, where I emphasized the need for regulators to be open to embracing innovation in the financial system. We are witnessing a seismic shift in how we think about money, value, and the fabric of our financial system, with blockchain technology holding significant promise.
Tokenization is one area where we see potential benefits, including faster ownership transfer, reduced regulatory burdens, and increased efficiency. However, it requires careful consideration to ensure that risks are adequately addressed. The recent announcement by the Federal Reserve Board that reputational risk will no longer be considered in our supervisory process marks a significant shift towards a more nuanced approach.
Regulatory certainty, tailoring rules to specific use cases, consistency with generally applicable rules, and protecting consumers and investors must be key principles guiding our regulatory framework. We need to build a framework that allows the United States to continue to be the best place in the world to innovate while minimizing risks.
As we stand at a crossroads, we have a choice to make: seize the opportunity to shape the future or risk being left behind. By embracing innovation with a principled approach, we can define the course of history and fulfill our responsibility to promote the safety and soundness of the banking system and financial stability.
Source: https://www.federalreserve.gov/newsevents/speech/bowman20250819a.htm