Fed governors talk GENIUS implementation, AI innovation

Federal Reserve governors raised several issues affecting credit unions – including implementing the GENIUS Act and Artificial Intelligence (AI) innovation – this week during the Wyoming Blockchain Symposium.

Both Federal Reserve Vice Chair for Supervision Michelle Bowman and Board of Governors member Christopher Waller spoke at the symposium. Bowman—who oversees bank regulation, supervision, and rulemaking—addressed GENIUS Act implementation. Signed into law last month, the GENIUS Act creates a framework for stablecoin regulation.

"Congress tasked the banking agencies with creating a regulatory framework for stablecoins, and we are working with our colleagues in the other agencies to move forward,” stated Bowman.

America’s Credit Unions has asked the NCUA to move quickly with the needed rulemakings needed to implement the bill.

Bowman also said policymakers should "encourage banks to provide banking products and services to any legal business, without disfavoring any particular viewpoints, businesses, or industries.”

America’s Credit Unions also asked the NCUA to take similar steps to reduce emphasis on reputational risk in its supervisory policy.

Waller said the Fed is “conducting technical research on the latest wave of innovations, including tokenization, smart contracts, and AI in payments” and commented on the use of AI to detect and prevent fraud, which he called “the next wave of AI advancement."

He also spoke in support of the Fed's involvement as payment system operator, via FedNow and other services, as “such a system promotes a vibrant economy, since it allows for participation from a broad range of individuals and businesses without requiring them to invest heavily in bilateral arrangements.”