The Federal Reserve Board published a speech by Vice Chair for Supervision Michelle W. Bowman outlining how bank supervision should accommodate blockchain-based activity, arguing for a tailored framework that balances safety and soundness with clearer pathways for banks to engage in digital assets, tokenization, and related technologies. Bowman highlighted tokenization as a potential way to reduce frictions in asset transfers and improve the speed and cost of payments, while noting that broad adoption has not yet occurred. She pointed to the GENIUS Act as elevating stablecoins and requiring the banking agencies to develop a regulatory framework, with the Federal Reserve working with peer agencies to move forward. On supervision, the speech reiterated that the Board has removed “reputational risk” from its examination programs and is updating guidance, manuals, and other materials to embed the change, with possible further regulatory action to increase certainty. It also referenced the reintegration of the Federal Reserve’s “novel supervision” activities into Reserve Bank examination staff, returning monitoring of banks’ “novel activities” to the normal supervisory process, and suggested exploring whether Federal Reserve staff should be permitted to hold de minimis amounts of crypto or other digital assets to build practical understanding. The speech signaled continued interagency work on stablecoin-related regulation and further supervisory material updates, and invited industry engagement on how emerging technologies could help address fraud, citing the existing interagency request for information on payments and check fraud with comments due by September 18, 2025.

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