Federal Reserve Vice Chair for Supervision Michelle Bowman has called for banks to comprise blockchain technology or probability losing relevance.
At the Wyoming Blockchain Symposium on Aug. 19, Bowman emphasized that regulators and banks must adopt a more proactive technique to the crypto industry.
She identified that integrating these new innovative applied sciences would be fundamental for holding relevance in a without warning evolving monetary landscape.
She acknowledged:
“It is needed that banks and regulators are commence to participating in new applied sciences and departing from an awfully cautious mindset. Regulators must sign new products and services and inspect the utility and necessity of embracing technology within the mature monetary sector.”
The Fed govt argued that this shift is no longer optionally available within the market nonetheless needed for the continued vitality of the banking intention. She added that institutions that fail to evolve would per chance change into peripheral gamers, while forward-having a stare banks would per chance pork up their space within the market.
Tokenization as an quick employ case
Bowman highlighted tokenization as one of basically the most quick capabilities of blockchain. She explained that tokenized belongings also can additionally be transferred digitally without intermediaries or the physical circulation of securities.
She acknowledged the manner eliminates many manual steps and custodial coordination that for the time being creates delays and will increase operational probability.
Moreover, Bowman illustrious that tokenized systems can streamline these steps, gash operational friction, and lengthen market entry.
Resulting from this, the Fed chief illustrious that regulatory alignment would per chance switch tokenization from pilot tasks to mainstream adoption that would per chance perhaps back each and each predominant banks and smaller community institutions.
Fraud prevention
Past tokenization’s effectivity, Bowman highlighted blockchain’s doable to fight fraud.
Within the speech, she conceded that monetary institutions face dangers from identity theft, scams, and connected crimes.
Nonetheless, she argued that if blockchain can measurably gash fraud, regulators also can unruffled facilitate its adoption rather then hinder it.
In accordance alongside with her:
“If fraud also can additionally be addressed the utilization of new technology, we also can unruffled make definite that the regulatory framework does no longer stand within the manner. I gaze this as an thrilling different for collaboration between industry and the Fed.”
