Fed's Bowman: Banking regulators are working on stablecoin rules

According to Mars Finance, Bowman, a member of the Fed, plans to tell House lawmakers on Tuesday that she will work to develop new rules for banks and stablecoins, as regulators seek to ensure healthy competition among Wall Street, fintech companies, and crypto assets firms. In prepared remarks for a hearing before the House Financial Services Committee, Bowman stated, “As a regulator, my responsibility is to encourage innovation in a responsible manner, and we must continuously enhance our capabilities to regulate the safe and sound risks that innovation brings.” She added that new technologies can create a more efficient banking sector, while expanding access to credit and allowing banks to compete fairly with fintech and digital asset companies. Bowman also stated that she will work with other agencies to develop capital and diversification regulations for stablecoin issuers as required by the Genius Act. This legislation mandates that these issuers formally sign up and hold dollar reserves equal to the amount of their stablecoins. She emphasized that agencies will provide clear guidance on digital asset issues and regulatory feedback on proposed new use cases.