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    Lawmakers Struggle with Stablecoin Definitions as US Congress Questions Fed’s Bowman

    Ethan CarterBy No Comments2 Mins Read
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    US Representative Stephen Lynch scrutinized Federal Reserve Vice Chair Michelle Bowman on Tuesday regarding her previous statements urging banks to “engage fully” with digital assets. He questioned the Fed’s involvement in promoting crypto frameworks while expressing uncertainty about the definition of stablecoins.

    During a Tuesday oversight hearing, Lynch questioned Bowman, the Fed vice chair for supervision, about comments she made at the Santander International Banking Conference in November. According to Lynch, Bowman indicated her support for banks “[engaging] fully” in relation to digital assets.

    However, Bowman’s remarks at the conference referred to “digital assets” generally, rather than specifically to cryptocurrencies. This led Lynch to question Bowman about the differences between digital assets and stablecoins.

    The Fed official stated that the central bank was authorized by Congress — specifically through the GENIUS Act, a bill aimed at regulating payment stablecoins — to develop a framework for digital assets.

    “The GENIUS Act mandates us to establish regulations to facilitate these types of activities,” said Bowman.

    Cryptocurrencies, Federal Reserve, Law, Congress, Stablecoin
    Representative Stephen Lynch at Tuesday’s oversight hearing. Source: House Financial Services Committee

    While the prices of many cryptocurrencies can be erratic, stablecoins, particularly those pegged to the US dollar, are typically “stable,” as their name implies. Although there have been cases where some coins have disconnected from their respective currencies, like the downfall of Terra’s algorithmic stablecoin in 2022, the majority of stablecoins maintain fluctuations within 1% of their peg.

    Related: Atkins states SEC possesses ‘sufficient authority’ to promote crypto regulations in 2026

    Bowman mentioned in August that Fed staff should be allowed to hold small “amounts of crypto or other types of digital assets” to better understand the technology.

    FDIC acting chair indicates stablecoin framework is forthcoming

    Also providing testimony at Tuesday’s hearing was Travis Hill, acting chair of the Federal Deposit Insurance Corporation. This government agency is among those tasked with executing the GENIUS Act, which US President Donald Trump enacted into law in July.

    Hill stated that the FDIC will introduce a stablecoin framework “later this month,” detailing requirements for supervising issuers.