Federal Reserve's Bowman: Banking regulators are working on stablecoin regulations

According to Bloomberg, Federal Reserve Governor Bowman plans to tell House lawmakers on Tuesday that she will work to establish new rules for banks and stablecoins, as regulators seek to ensure healthy competition among Wall Street, fintech companies, and cryptocurrency firms.

In prepared remarks for a House Financial Services Committee hearing, Bowman stated, "As regulators, it is our responsibility to encourage innovation in a responsible manner, and we must continually enhance our capabilities to regulate the safety and soundness risks that innovation brings." She added that new technologies can create a more efficient banking sector, expanding access to credit while allowing banks to compete fairly with fintech and digital asset companies.

Bowman also indicated that she will collaborate with other agencies to establish capital and diversification regulatory requirements for stablecoin issuers, as mandated by the "Genius Act." This legislation requires these issuers to formally register and hold dollar reserves equivalent to their issued stablecoins. She emphasized that agencies will provide clear guidance on digital asset issues and regulatory feedback on proposed new use cases.