Fed Executive Urges Policy Change Letting Staff Hold Small Amounts Of Crypto To Gain Hands-On Regulatory Experience

Fed Official Pushes For Staff To Be Allowed To Hold Crypto

Federal Reserve Vice Chair for Supervision Michelle Bowman has called for a change in policy that would let central bank employees own small amounts of cryptocurrency.

Speaking at the Wyoming Blockchain Symposium, she argued that personal exposure to digital assets would help regulators understand how transactions work in practice.

Bowman said,

“There’s no replacement for experimenting and understanding how that ownership and transfer process flows. I certainly wouldn’t trust someone to teach me to ski if they’d never put on skis, regardless of how many books and articles they have read, or even wrote, about it.”

At present, Fed rules bar staff and their spouses from holding cryptocurrencies or related financial products.

The restrictions were tightened in 2022 after scrutiny over trading activities by senior officials during the pandemic.

Talent Retention And Recruitment Concerns

Bowman also pointed out that the ban could be limiting the Fed’s ability to recruit and keep examiners with relevant skills.

Many candidates come from the private sector, where experience with digital assets is increasingly valued.

Allowing “de minimis” holdings, she suggested, would make public service roles more attractive while giving current staff practical insight into the fast-evolving sector.

Urging Regulators To Embrace Technology

In her address, Bowman criticised what she described as an “overly cautious mindset” among regulators towards emerging technologies such as blockchain and artificial intelligence.

She warned that failing to adapt could leave the banking system sidelined as innovation moves ahead elsewhere.

“We must choose whether to embrace the change and help shape a framework that will be reliable and durable — ensuring safety and soundness and incorporating the benefits of both efficiency and speed — or to stand still and allow new technology to bypass the traditional banking system altogether.”

Addressing Reputational Risk And Rulemaking

Bowman also suggested scaling back the use of reputational risk as a supervisory tool, saying it has often been applied too broadly and discouraged legitimate business.

She urged banks and crypto firms to work directly with regulators to share knowledge of blockchain systems.

“I am committed to changing our culture and attitude toward the adoption and integration of technology and new products and services. Change is coming. If this is not our approach, then we risk the banking system becoming less relevant to consumers, businesses and the overall economy.”

Crypto-Friendly Climate Under Trump Administration

Her comments come as US financial policy shifts under President Donald Trump, who earlier this month signed an executive order instructing banking regulators to review claims of debanking in the crypto sector.

The Fed also recently announced that it would end a supervision programme for blockchain-related activities introduced in 2023 during the Biden administration.

Bowman did not specify what level of crypto holdings might be acceptable for staff, but her remarks suggest the Fed may be preparing to soften its stance on internal ownership rules.

A Test Of Trust And Relevance For Regulators

Coinlive believes Bowman’s push strikes at a deeper question: can regulators truly grasp technologies they are barred from touching?

If the Federal Reserve hesitates to let its own staff experience crypto, it risks regulating from a distance while the financial world moves closer to digital assets.

The debate is less about ownership limits and more about whether the central bank is prepared to evolve alongside the system it seeks to oversee.