Federal Reserve Governor Michelle Bowman emphasized the need for collaboration between states and the federal government to regulate stablecoins, as lawmakers continue to work on legislation. Speaking at the DC Blockchain Summit, Bowman highlighted the importance of a partnership, citing the potential risks associated with stablecoins, such as runs and other types of risks that may require protections similar to those provided to the US dollar.

Bowman acknowledged the openness of state-level conversations about expanding into the space but stressed the need for the Federal Reserve to have a seat at the table in shaping the regulatory framework. This framework is currently being debated through various bills, including one introduced by Senators Cynthia Lummis and Kirsten Gillibrand, which aims to create federal and state regulatory regimes for stablecoin issuers while preserving the dual banking system.

The bill, introduced in April, includes a provision allowing state trust companies to create and issue payment stablecoins up to $10 billion. However, Gillibrand expressed frustration over the lack of progress on the bill, citing the need for a hearing, markup, or debate in the committees of jurisdiction. Despite working well with the Treasury and the Fed, she noted the absence of a focused effort from the White House on these issues.

The ongoing legislation, including the stablecoin bill, has been in the works for almost two years, with lawmakers like House Financial Services Committee Chair Patrick McHenry and ranking Democrat Maxine Waters working to craft a regulatory framework. A key point of contention has been determining the primary regulator for stablecoin issuers – the federal government or state regulators. Bowman's call for a partnership highlights the need for cooperation to address the complexities of stablecoin regulation effectively.