US Fed Official Michelle Bowman Backs Limited Crypto Ownership for Staff

Michelle Bowman, Federal Reserve Vice Chair for Supervision, has suggested that employees of the U.S. central bank should own limited cryptocurrencies. The Fed official was speaking at the blockchain conference in Wyoming, during which she suggested that owning limited crypto can give the staff direct exposure. This would help them understand the underlying technology that is shaping modern finance.

Michelle Bowman In Favor of Staff Owning Crypto

Bowman said current restrictions on Fed staff ownership of digital assets may be counterproductive. Under existing rules, most Fed employees and their spouses are barred from holding cryptocurrencies, exchange-traded funds tied to digital assets, or shares in crypto companies. These rules were tightened in 2022 after finding out that several top officials had engaged in unusual trading during the early days of the COVID-19 pandemic.

Bowman argued that the outright ban hinders regulators’ ability to fully understand blockchain technology. “We will soon be establishing a framework for supervising issuers of these assets. There’s no replacement for experimenting and understanding how that ownership and transfer process flows,” she said.

The Fed’s strict investment policies may also create barriers to hiring, Bowman warned. She noted that staff with direct knowledge of crypto are increasingly in demand. “I certainly wouldn’t trust someone to teach me to ski if they’d never put on skis, regardless of how many books or articles they’ve read,” Bowman said. Allowing small-scale ownership, she added, could help attract and retain examiners with the right expertise.

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Beyond staff ownership, Bowman urged regulators to abandon what she described as an “overly cautious mindset” toward new financial products. She warned that excessive skepticism risks leaving traditional financial institutions behind as blockchain adoption accelerates.

“Technology could change the banking system regardless of how banks and regulators choose to respond,” Bowman said. “We must choose whether to embrace the change and help shape a framework that will be reliable and durable … or to stand still and allow new technology to bypass the traditional banking system altogether,” she added

She acknowledged the risks associated with adopting new technologies but insisted that they could be mitigated. In her view, the potential benefits of blockchain, particularly its efficiency and speed, outweigh the downsides if managed under a sound regulatory framework.

Bowman’s remarks come amid a broader shift in U.S. crypto policy under President Donald Trump. Earlier this month, Trump signed an executive order directing banking regulators to investigate allegations of “debanking” by crypto firms and conservative groups. The Fed also announced it would end a supervisory program established under the Biden administration that oversaw banks’ involvement in crypto and blockchain-related activities.

Bowman didn't say which digital assets or investment limitations should be allowed, but her views contribute to the push for a more crypto-friendly regulatory approach in the U.S. banking system.

Her speech shows how hard it is for regulators to find a balance between being careful and being creative. Bowman said that regulators need to know about both the risks and the "extensive benefits of new technology" to make sure the financial system is strong and competitive in the digital age.