The FED, as one of the highest-level institutions that oversee the banking system, has made a critical appointment for the cryptocurrency world.
Michelle Bowman has been confirmed as the Fed’s new vice chair of oversight by a 48-46 vote in the Senate. A Kansas Republican who previously served on the Fed’s board, Bowman will now be one of the top officials driving the agency’s regulatory agenda.
Created in the wake of the 2008 global financial crisis, the role was designed to free the Fed from its regulatory role outside of monetary policy. Bowman’s appointment could also herald a new era in the cryptocurrency sector’s ongoing banking woes.
The Fed, which has long been criticized by the cryptocurrency industry, has been cautious about digital assets, along with the U.S. Treasury Department’s Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). Industry representatives and some lawmakers argued that these institutions were blocking crypto companies’ access to banking services. However, after Donald Trump was re-elected as president in early 2025, this policy changed. In April, the Fed, along with other regulatory agencies, rolled back the restrictions it had previously imposed.
The Fed’s role in regulating stablecoin issuers remains unclear. While legislation is being worked on, Republican lawmakers are attempting to limit the Fed’s authority in this area. However, current bills continue to include the Fed’s role in regulating stablecoin issuance by banks under its supervision and a role in assessing the adequacy of regulators abroad.
Democrats want the Fed to also oversee non-bank stablecoin issuers, though the bill currently being debated in the Senate gives that responsibility to the OCC.
Bowman will work under Fed Chair Jerome Powell in his new role. Powell had previously announced that he would hand over the task of setting the oversight agenda to his deputy. Bowman will replace Democrat Michael Barr in this role. Barr continues to serve on the Fed board despite his term ending.
*This is not investment advice.
