Lawmakers Challenge Fed on Crypto Oversight as Stablecoin Rules Loom
US Representative Stephen Lynch confronted Federal Reserve Vice Chair Michelle Bowman during an oversight hearing, scrutinizing her past endorsement of banks engaging with digital assets. The exchange highlighted ongoing regulatory ambiguity, particularly around stablecoin definitions.
Bowman clarified her November comments applied broadly to digital assets rather than cryptocurrencies specifically. She cited the GENIUS Act as congressional authorization for the Fed to develop frameworks for payment stablecoins, stating "The GENIUS Act requires us to promulgate regulations to allow these types of activities."
The discussion underscored the tension between innovation and oversight in crypto markets. While stablecoins maintain pegs to traditional assets, the hearing referenced Terra's collapse as evidence of inherent risks in algorithmic models.
