A leader at the Federal Reserve is pumping the brakes on speculation surrounding crypto engagement from the regulator.
In an August 17 speech, Federal Reserve Governor Michelle Bowman took issue with many key areas of the Fed's work and its crossover with fintech and crypto industry concerns.
Key among them is the push for a US central bank digital dollar, or CBDC, also known as a digital dollar. The subject of much political speculation, a digital dollar has grown increasingly contentious over the past year.
Bowman said that the Fed's plans for FedNow will fill the niche many envision for a US CBDC.
"The FedNow Service will enable financial institutions of every size, and in every community across America, to provide safe and efficient instant payment services. It is intended to be a flexible, neutral platform that will support a broad variety of instant payments," Bowman said. "My expectation is that FedNow addresses the issues that some have raised about the need for a CBDC."
Bowman also took an oblique potshot at the crypto industry's hope for banks working with crypto assets.
"I am hearing more discussions involving banks' interest in offering services involving crypto-assets. The chatter seems to originate more from those outside the banking industry, but I'll put that aside for now," she said.
Turning to recent guidelines on requests for Fed "master accounts," Bowman also struck a tentative tone.
"Publishing the guidelines is an important step to providing transparency and consistency across the Federal Reserve System. However, more work remains to be completed before a process is established to fully implement the guidelines. In the meantime, there is a risk that the guidelines could establish false expectations regarding the timeline for evaluating and acting on these requests."
Effectively, Bowman is warning that the backlog of requests for master accounts won't disappear any time soon.
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