Don’t Get Left Behind! Fed Warns Banks: Embrace Blockchain or Become Obsolete

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Well, it looks like the future is knocking at the door, and it’s got a big ol’ blockchain in hand. Now, if the banks don’t want to end up like your grandmother’s VHS collection, they better start listening up.

  • Some banks are already using blockchain behind closed doors, even if they’re still pretending not to like crypto.
  • Fed’s Michelle Bowman says blockchain is the real deal, creating efficiencies faster than a raccoon in a trash can.
  • If regulators don’t pick up the pace, the whole system will just start looking like a dinosaur on a treadmill.

In a speech that could make even the most tech-averse banker sweat a little, Federal Reserve Vice Chair Michelle W. Bowman took the stage at the annual Wyoming Blockchain Symposium on August 19. She had a message for everyone in the room: “If you’re not getting in on blockchain, you might as well be wearing a floppy disk as a necklace.” Okay, maybe not that dramatic, but close.

Bowman talked about how blockchain and artificial intelligence are becoming a *big* deal in the U.S. banking system. Sure, some banks are already using private blockchain networks for their back-end work, and tokenized assets are making transferring real-world assets smoother than a greased weasel on a Slip’n Slide. But don’t get too excited, folks. The big players-like the Fed and the banks-are still tiptoeing around these newfangled technologies, likely because they’ve got a bad case of the “what-if-this-goes-wrong” jitters.

Let’s not forget the reputational risk involved, either. According to Bowman, this was the big reason behind the whole “debanking” mess where banks got a little too picky about which legal businesses they wanted to serve. The way she sees it, no one should be getting denied banking services just because someone doesn’t like their politics or business practices. Fair enough, Michelle. We’re all just trying to buy coffee here.

“Let me be clear. We must adopt an approach that does not penalize or prohibit a bank from banking a customer engaged in legal activity. This approach must allow and encourage banks to provide banking products and services to any legal business, without disfavoring any particular viewpoints, businesses, or industries,” Bowman said.

The Clock’s Ticking: Stay Tech-Savvy, Or Get Out of the Way

According to Bowman, regulators are the ones who set the pace here. It’s their job to make sure new technologies actually benefit the banking system as a whole. If they drop the ball, we might end up with a banking system as useful as a screen door on a submarine.

“If this is not our approach, then we risk the banking system becoming less relevant to consumers, businesses, and the overall economy. As a result, the banks will play a diminished role in the financial system more broadly,” Bowman said.

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2025-08-20 19:04