In a significant policy statement, Federal Reserve Vice Chair for Supervision Michelle Bowman indicated that the central bank is considering amendments to its stringent ethics rules to allow staff limited exposure to cryptocurrency assets.
The rationale, outlined during a speech on Tuesday, is one of regulatory efficacy. Bowman contends that a “working understanding of the underlying functionality” of digital assets is essential for staff developing the Fed’s forthcoming supervisory framework for crypto issuers.
This educational approach would be tightly constrained, permitting only minimal holdings.
This potential shift follows a 2022 tightening of investment rules after ethical lapses were discovered. The proposal seeks to find a middle ground between preventing conflicts of interest and fostering necessary technical expertise within the regulator.
