The senior regulatory official of the Federal Reserve says that the staff of the United States Central Bank must be able to invest a small amount in cryptography to help them understand the technology.
The vice president of the supervision of Fed Fed for supervision, Michelle Bowman, said at a blockchain event in Wyoming on Tuesday that the regulator should consider allowing its staff to “contain minimum amounts of cryptography or other types of digital assets so that they can achieve a labor understanding of the underlying functionality.”
“We will soon establish a framework to supervise the issuing of these assets,” he added.
“There is no replacement to experience and understand how this property and transfer process flows.”
Currently, most FED employees and their spouses are prohibited by having cryptography or products that are concentrated in cryptography, such as stock -listed funds or actions in cryptographic companies.
The Fed hardened its rules over all investments in early 2022 after it was revealed that three senior officials had an unusual commercial activity in 2020, since the regulator took measures to support the US economy in the first days of the COVID-19 pandemic.
Allowing cryptography could help recruitment, regulations
Bowman said that the investment restrictions of the Fed personnel “can be a barrier to recruit and retain the examiners with the necessary experience,” and relieve the rules would help the existing personnel to better understand technology.
“I would certainly not trust someone to teach me to ski if skis never put on, regardless of how many books and articles they have read, or even wrote about it.”
Bowman urges Fed not to “stay still”
In their speech, Bowman said that bank regulators had a “too cautious mentality” and urged them to be less skeptical with new financial products and “recognize the usefulness and need to adopt technology in the traditional financial sector.”
She said that some bankers are concerned that blockchain technology threatens traditional commercial models, but that technology could “change the banking system regardless of how banks and regulators choose to respond.”
“We must choose whether to adopt change and help shape a framework that will be reliable and lasting, ensuring safety and solidity and incorporating the benefits of efficiency and speed, or staying still and allowing the new technology to omits the traditional banking system completely,” he added.
“From the perspective of a regulator, the choice is clear.”
Related: The new cryptographic defense group premieres in Wyoming Summit
Bowman said he recognized the risks in the adoption of new technologies, but that they could be compensated or “at least decide to be manageable when we recognize and consider the potentially extensive benefits of the new technology.”
The friendly thrust with Trump’s cryptography
Bowman did not specify the types of cryptographic products or what amounts would suggest that the Fed allows, but his comments are the latest cryptographic comments that regulators have taken under the Trump administration.
On Friday, the Fed said it would end a supervision program for activities related to crypto and blockchain carried out by the banks, which the Biden administration established in 2023.
Trump also signed an executive order earlier this month that ordered bank regulators to investigate debate claims made by the cryptographic sector and conservatives.
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