Speaking at the Salzburg Global Seminar on Banking Regulation and Supervision, Mr. Bowmann called on global regulators to pay attention to new banking activities, particularly banking-as-a-service and the current supervision of digital assets. Bankers are in a “supervisory vacuum” over emerging technologies, Bowman said.
“While some efforts have been made to provide guidance, there remains considerable uncertainty about the admissibility of such activities and supervisory expectations.” […]. This puts banks in a dangerous position of relying on general but non-binding statements by policy makers, only to be criticized at some point in the future.” Bowman said.
He also noted the risks posed by the current regulatory state, noting that without a clear regulatory framework, regulators could impose new requirements on companies after significant investments have been made. “If our role is to be effective oversight and regulation, we need to be willing to engage in both novel and traditional activities,” she added.
Bowman joins many others calling for a clear regulatory framework for digital assets. Ratings agency Moody’s warned June 20 that investors and businesses could turn to other crypto-friendly jurisdictions without support from U.S. lawmakers on a bill focused on digital assets.
Members of the House Financial Services Committee and the House Agriculture Committee recently released an argumentative draft that lays out a path for labeling certain crypto assets as digital goods. The bill would prohibit the U.S. Securities and Exchange Commission (SEC) from refusing to register digital asset trading platforms as regulatory alternative trading systems, allowing such companies to offer “digital commodities and payment stablecoins.” It is a content that allows
Failure to provide a clear approach to financial institutions on new technology “could have a significant impact on banks weathering higher interest rates,” Bowman warned.
Michelle Bowman, a member of the U.S. Federal Reserve Board, criticized The United States does not have a clear regulatory framework for new technologies.
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