The governor of the Federal Reserve said that crypto activities “present a number of important difficulties”
Michelle W. Bowman, the governor of the Federal Reserve, has noted that despite the expansion of cryptocurrencies, they remain a source of worry, particularly in the banking industry.
During a discussion with the Institute of International Finance (IIF) on September 30, Bowell said that cryptocurrencies present a number of concerns and that the regulatory landscape should be prepared to accommodate the developing technology.
However, the governor emphasized that the rapidly growing technology behind cryptocurrency might make it difficult to execute some regulations. For instance, Bowell stated that difficulties arise if stakeholders in the financial industry lack expertise in regulating crypto assets and the rules are ambiguous.
During the event, Bowell said that banks are permitted to participate in the crypto-related activity, but they must first comprehend regulatory expectations. However, she advocated for more conversation to determine the optimal regulatory stance. As said by Bowell:
In addition, the official emphasized that banks must have a clear regulatory framework that can match the risk connected with the price volatility of the cryptocurrency industry.
She emphasized the need of bringing crypto into banking or pushing digital assets outside of banks as a precautionary measure.