According to Cointelegraph, Federal Reserve Board governor Michelle Bowman shared her views on financial innovation in a speech at Harvard Law School on October 17. Bowman discussed central bank digital currency (CBDC) and stablecoin, as well as distributed ledger technology and ways to improve existing technology. She questioned the need for such innovations and suggested that banks can play a role in preventing government overreach. Bowman believes the U.S. intermediated banking model is an appropriate model for future financial innovation.

Bowman warned that a CBDC could lead to bank disintermediation if not properly designed. She saw no compelling arguments for the superiority of CBDC over other alternatives, such as the FedNow service introduced in July. The Federal Reserve has stated that it would not issue a U.S. dollar CBDC without a congressional mandate. Bowman also called for a regulatory framework for financial innovation based on the principle of the same regulation for the same risks. She cited the low level of regulation of stablecoins as her main argument against their use.

Bowman acknowledged that some frictions in the payment system are there by design, such as Anti-Money Laundering and prevention of overreach. She also expressed support for research on CBDCs, stating that the Federal Reserve remains open to multiple options to improve the payments landscape.