Michelle Bowman says Fed could allow staff to hold small crypto amounts, citing Ether to improve understanding

• Fed staff should be allowed small crypto holdings to build practical expertise.

• Bowman says easing rules could improve recruitment and rulemaking for digital-asset oversight.

• Most Fed employees are currently barred from crypto ownership after 2022 investment-rule changes.

Fed crypto ownership: Michelle Bowman urges limited crypto holdings for staff to improve oversight — read how this could shape Federal Reserve policy.

What is the Federal Reserve’s proposed change to staff crypto ownership?

The Federal Reserve’s proposed change would permit staff to hold small, de minimis amounts of crypto or digital assets to gain hands-on experience. Michelle Bowman, the Fed vice chair for supervision, suggested this step at the Wyoming Blockchain Symposium to support better rulemaking and recruitment.

How would allowing Fed staff crypto holdings improve supervision?

Allowing modest personal holdings would let examiners and policymakers understand transaction flows, custody, and market mechanics first-hand. Bowman argued practical exposure complements academic study and can reduce talent gaps when hiring examiners familiar with distributed ledger technology.

Federal Reserve vice chair for supervision, Michelle Bowman, says the central bank should roll back its restrictions that ban staff from buying crypto.

The Federal Reserve’s top regulatory official says staff from the US central bank should be allowed to invest a small amount in crypto to help them understand the technology.

Fed vice chair for supervision Michelle Bowman said at a blockchain event in Wyoming on Tuesday that the regulator should consider allowing its staff “to hold de minimus amounts of crypto or other types of digital assets so they can achieve a working understanding of the underlying functionality.”

“We will soon be establishing a framework for supervising issuers of these assets,” she added.

“There’s no replacement for experimenting and understanding how that ownership and transfer process flows.”

Currently, most Fed staffers and their spouses are barred from owning crypto or products that concentrate on crypto, such as exchange-traded funds or shares in crypto companies.

The Fed tightened its rules on all investments in early 2022 after it was revealed that three top officials had unusual trading activity in 2020, as the regulator took action to support the US economy in the early days of the COVID-19 pandemic.

How could allowing crypto ownership affect recruitment and rulemaking?

Bowman said the Fed staff investment restrictions “may be a barrier to recruiting and retaining examiners with the necessary expertise,” and easing the rules would help existing staff better understand the technology.

She used a practical analogy: “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.”

Why does Bowman urge the Fed not to “stand still”?

In her speech, Bowman said bank regulators had an “overly cautious mindset” and urged them to be less skeptical of new financial products and “recognize the utility and necessity of embracing technology in the traditional financial sector.”

She warned that blockchain could change banking regardless of regulators’ responses and urged shaping a reliable framework that balances safety, soundness, efficiency and speed.

“From a regulator’s perspective, the choice is clear.”

Bowman acknowledged risks in adopting new technology but said those risks could be managed and weighed against potential extensive benefits.

When did the Fed change staff investment rules and why?

The Fed tightened employee investment rules in early 2022 after disclosures of unusual trading by senior officials in 2020. The updated restrictions limited employee holdings across asset classes to avoid conflicts of interest during sensitive monetary-policy periods.

What recent policy moves put Bowman’s remarks in context?

Bowman’s comments come as the Fed ends a 2023 supervision program for crypto and blockchain activities and the current Administration has directed banking regulators to review alleged debanking claims. These developments suggest a broader shift in regulatory posture toward digital assets.

Frequently Asked Questions

Can allowing crypto ownership create conflicts of interest?

Yes, if not properly limited. Any easing would need strict thresholds, disclosure, and recusal rules to prevent conflicts between personal holdings and supervisory duties.

How much crypto might be allowed under a de minimis rule?

Bowman did not specify amounts. Practical proposals typically suggest small fixed-dollar caps or a low percentage of salary/net worth to limit exposure while enabling hands-on learning.

Key Takeaways

• Practical experience matters: Allowing small holdings helps examiners learn custody and transaction flows.
• Recruitment benefit: Eased rules could attract and retain crypto-savvy staff.
• Safeguards required: Any change needs clear de minimis limits, disclosure, and conflict-of-interest controls.

Conclusion

Michelle Bowman’s call to allow limited Fed staff crypto ownership aims to strengthen the Federal Reserve’s expertise and improve regulatory frameworks for digital assets. Moving forward, policymakers will need to balance practical experience with strict safeguards to preserve integrity and public trust. COINOTAG will monitor developments and report policy updates.

Author: COINOTAG

Published: 2025-08-20 | Updated: 2025-08-20