Fed urges banks to embrace blockchain innovation
Banks must adopt blockchain to stay relevant, using tokenisation to cut delays and reduce fraud.
Federal Reserve Vice Chair for Supervision Michelle Bowman has warned that banks must embrace blockchain technology or risk fading into irrelevance. At the Wyoming Blockchain Symposium on 19 August, she urged banks and regulators to drop caution and embrace innovation.
Bowman highlighted tokenisation as one of the most immediate applications, enabling assets to be transferred digitally without intermediaries or physical movement.
She explained that tokenised systems could cut operational delays, reduce risks, and expand access across large and smaller banks. Regulatory alignment, she added, could accelerate tokenisation from pilots to mainstream adoption.
Fraud prevention was also a key point of her remarks. Bowman said financial institutions face growing threats from scams and identity theft, but argued blockchain could help reduce fraud.
She called for regulators to ensure frameworks support adoption rather than hinder it, framing the technology as a chance for collaboration between the industry and the Fed.
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