US Fed’s Michelle Bowman says crypto tech could bypass traditional banking system altogether

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It is becoming increasingly clear that many government officials have grown past the denial stage when it comes to views on crypto and blockchain technology.

Recent comments from the US Federal Reserve vice chair for supervision of the board of Governors of the Federal Reserve System, Michelle Bowman, proves this.

Although most of crypto and traditional media are focused on her push for the revision of Fed rules for investments related to crypto assets, her highlight of what risks the ecosystem poses to the traditional banking system was bold.

The Federal Reserve’s top regulatory official said 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 minimal “amounts of crypto or other types of digital assets so they can achieve a working understanding of the underlying functionality.”

“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.”

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.”

Bowman said, “We must choose whether to embrace the change and help shape a framework that will be reliable and durable — ensuring safety and soundness and incorporating the benefits of both efficiency and speed — or to stand still and allow new technology to bypass the traditional banking system altogether.” – Cointelegraph report

This proves one long-held belief of many crypto enthusiasts, which is that many government officials don't really understand or know how crypto assets work.

By providing the analogy in her statement, we can deduce that many in the system are clueless of what comes with this technology.

That said, her other comment, specifically on the traditional banking system being bypassed by the technology in an event of inaction from the government shows an acknowledgement of the threat crypto poses to TradFi dominance or control of the flow of money.

Is this bullish for crypto though?

I'd say yes.

If the Fed can admit the threat and simultaneously, the value of this technology, that's added evidence that we are doing something right.

Earlier I said that they've grown past the stage of denial, but it would appear that they are still in the delusion phase of believing that they can effectively regulate the industry.

We'll all be here to see them fail to do that, unless of course, every builder and user of this technology proves weak and surrenders.

In case you missed it

Earlier today, reports surfaced of SoFi Technologies making a move on the over $740 billion remittance market with an integration with Lightspark's Bitcoin Lightning network for cheaper international money transfers.

Thank you for reading!

Posted Using INLEO