US Lawmaker Grills Fed's Bowman Over Digital Assets and Stablecoin Definitions

Source: DefiPlanet Original Title: US Lawmaker Grills Fed’s Bowman Over Digital Assets and Stablecoin Definitions Original Link:

Quick Breakdown

• Rep. Lynch challenged Michelle Bowman on her interpretation of digital assets and stablecoins.
• Bowman said the GENIUS Act mandates the Fed’s work on digital assets.
• The FDIC plans to release a proposed stablecoin oversight framework before the end of the month.

Lynch challenges Bowman on “engage fully” remarks

US Representative Stephen Lynch pressed Federal Reserve Vice Chair for Supervision Michelle Bowman on Tuesday, questioning her past encouragement for banks to “engage fully” with digital assets and expressing confusion over how the Fed distinguishes between digital assets and stablecoins.

During the oversight hearing, Lynch referenced Bowman’s November appearance at the Santander International Banking Conference. He suggested she had endorsed banks becoming more active in cryptocurrencies, though Bowman clarified that her comments referred broadly to digital assets, not specifically crypto tokens.

Fed says congressional mandate drives digital-asset work

Bowman explained that the Fed’s involvement stems from the recently enacted GENIUS Act, a law that regulates payment stablecoins and directs federal agencies to craft supporting rules.

“The GENIUS Act requires us to promulgate regulations to allow these types of activities,”

Bowman told lawmakers. She also reiterated her previous stance that Fed staff should be allowed to hold small amounts of digital assets to better understand the technology.

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

she said.

FDIC signals stablecoin oversight rules arriving soon

Also testifying was Travis Hill, acting chair of the Federal Deposit Insurance Corporation (FDIC). Hill confirmed that the agency will unveil a proposed regulatory framework for stablecoin issuers “later this month,” marking a significant step in implementing the GENIUS Act signed by President Donald Trump in July.

Hill said the forthcoming proposal will outline supervisory expectations for firms issuing US-dollar-pegged tokens. This sector has grown rapidly despite ongoing questions around risk, backing, and consumer protection.

“The report recommends clarifying or expanding permissible activities in which banks may engage, including the tokenization of assets and liabilities.”

Hill said.

“We are also currently developing guidance to provide additional clarity with respect to the regulatory status of tokenized deposits.”