Fed Official Advocates for Letting Staff Own Bitcoin
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On August 19, Federal Reserve Vice Chair for Supervision Michelle Bowman advocated for relaxing the central bank’s prohibition on staff ownership of cryptocurrencies.
She contended that such a policy change would catalyze a broader debate on the institution’s approach to digital assets, both as a financial regulator and a core component of the financial system.
Holding Crypto Can Build Real Understanding of Its Functionality
Speaking at a crypto conference in Jackson Hole, Wyoming, Bowman asserted that firsthand exposure, even when limited, is crucial for developing a functional knowledge of how digital assets operate.
She argued that theoretical study from policy papers is an insufficient substitute for the practical understanding gained by holding or using the technology regularly.
Bowman explained that without first-hand experience, regulators may struggle to grasp the functionality of the technology they are tasked to oversee.
🇺🇸 JUST IN: Fed Vice Chair Michelle Bowman is calling for regulators to embrace crypto, blockchain, and AI to keep the U.S. financial system competitive.
She even suggested Fed staff be allowed to hold crypto – clear signs the tide is turning bullish in Washington. pic.twitter.com/wLL6J4TV82
— CryptosRus (@CryptosR_Us) August 19, 2025
Beyond stifling expertise, Bowman argued the ban cripples the Fed’s ability to attract qualified examiners. Experts immersed in the crypto ecosystem, she reasoned, are unlikely to join an institution that prohibits them from holding the very assets they understand.
Easing these rules, she suggested, would not only empower staff to better understand the systems they regulate but also enhance the Fed’s ability to attract and retain vital talent.
For now, most Federal Reserve employees and their spouses remain barred from owning crypto or related products such as exchange-traded funds or shares in crypto-focused companies.
These rules were tightened in 2022 following scrutiny of unusual trading activity among three senior officials.
Nonetheless, Bowman did not outline which specific products or how much crypto staff should be allowed to own. Her remarks, however, add to a growing list of crypto-friendly signals coming from regulators during the Trump administration.
Tokenization Technology Can Solve Many Banking Frictions
A separate portion of Bowman’s address focused on bank regulators who have an overly cautious mindset.
She urged them to be less skeptical of crypto-related innovation and to recognize the importance of integrating new technology into traditional finance.
One area she highlighted was tokenization. According to Bowman, tokenization can unlock major advantages for the banking sector. It can make capital markets more accessible, speed up payments, and reduce transaction costs.
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International transfers, which remain slow and expensive, could benefit the most. Even smaller community banks could see efficiency gains from adopting tokenized processes.
She noted that tokenization offers more than just technical improvements. It can reshape the way payments are made by making them faster, more direct, and far cheaper.
Bowman also pointed to improving user experiences and accessibility for everyday investors and institutions. A key development accelerating this shift, she noted, is the passage and signing of the GENIUS Act, which has moved stablecoin regulation to the forefront of policy discussions.
The US Treasury Department has already opened a public comment period, with full enforcement expected within 18 months. If the Treasury and Federal Reserve finalize regulations earlier, the rules could take effect in as little as 120 days.
