US regulators signalled a significant shift in how they will oversee digital payments, stablecoins and bank–fintech partnerships during a Congressional hearing this week, outlining plans that could reshape the future of US retail and wholesale payments.
Testifying before the US House Financial Services Committee, leaders from the Federal Reserve, Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration (NCUA) each highlighted stablecoin regulation, tokenisation and payment fraud as core priorities for 2026, marking a clear pivot towards digital-asset infrastructure inside the regulated banking system.
The hearing also revealed a secondary political thread running through each agency’s agenda: a coordinated effort to restrict examiner discretion and remove the use of “reputational risk” as a supervisory tool – an issue that has become closely tied to political claims of “debanking”.
Stablecoins take centre stage across agencies
For the first time, all four prudential regulators publicly aligned around the GENIUS Act, the new federal law creating a licensing regime for bank-issued payment stablecoins.
Federal Reserve Vice Chair for Supervision Michelle Bowman told lawmakers that the Fed is working with other agencies to build the capital and liquidity rules required under the Act. She said the aim is to ensure stablecoin issuers operate within a framework that “supports a safe and sound banking system” while giving banks space to compete with nonbank firms.
Bowman also said the Fed must give banks clearer guidance on which digital-asset activities are allowed, adding that regulators should be “encouraging innovation in a responsible manner”.
At the OCC, Comptroller Jonathan Gould framed stablecoin regulation not only as a prudential challenge, but as a matter of national competitiveness. He said the GENIUS Act gives the OCC a mandate to “anchor an important financial innovation in a prudent regulatory framework and to ensure American dominance in a competitive global environment”.
Gould also linked the initiative to the broader adoption of new technologies, noting: “Innovation has driven American finance from the telegraph to the blockchain.”
FDIC sets out permissive digital-asset stance
Acting FDIC Chairman Travis Hill delivered the longest – and arguably the most consequential – testimony on the future of payments. He confirmed that the FDIC has withdrawn several earlier statements warning banks away from public blockchains, rescinded the requirement for banks to notify supervisors before engaging in crypto-related activities, and is preparing to regulate bank-affiliated stablecoin issuers directly.
Hill told lawmakers the FDIC will publish its stablecoin application framework “later this month” and follow with prudential rules on capital, liquidity and reserves “early next year”. He also said the agency is working on guidance to clarify “the regulatory status of tokenised deposits”, signalling a willingness to expand banks’ role in issuing on-chain deposit claims.
Beyond stablecoins, Hill highlighted a dramatic shift in AML and onboarding policy. The FDIC, in collaboration with FinCEN and other regulators, has granted banks flexibility to collect only the last four digits of a customer’s taxpayer ID during onboarding, calling it a step that “will allow institutions to take advantage of technology to make it easier to serve their customers”.
‘Main-street pragmatism’ towards new technology
NCUA Chairman Kyle Hauptman echoed the pro-innovation tone, but positioned it through the lens of consumer access. He emphasised that credit unions may use third-party vendors to provide digital-asset services, describing the agency’s posture as “main-street pragmatism” focused on helping institutions evaluate risks rather than prohibiting new tools.
Hauptman also spotlighted growing interest in AI adoption and pointed to the NCUA’s new guidance hub, which provides resources on cybersecurity, data reliability and oversight of third-party AI providers.
Regulators converge on a political flashpoint
Across all testimonies, regulators described efforts to narrow the scope of examiner judgement—particularly in relation to reputational risk and account closures.
The OCC stated plainly: “We are ending the weaponization of finance. No American should be denied access to banking products and services because of political or religious beliefs or lawful business activity.”
Bowman said the Fed has already “ended the practice of using reputational risk” in examinations.
Hill detailed a new joint rule that would prohibit examiners from directing banks to close accounts based on “political, social, religious, or other views”, and said the FDIC has already reviewed bank policies and complaint data to assess compliance.
This area is likely to draw scrutiny from Democrats on the Committee, who have argued that the term “debanking” has been misapplied in cases involving financial-crime or fraud controls rather than political bias.
The FDIC also used the hearing to highlight the growing impact of payment fraud across cheques, ACH, wire transfers and instant payments. Hill described it as a “significant—and growing—concern” and confirmed that the FDIC, OCC and Federal Reserve have convened a working group to analyse industry feedback and consider regulatory or supervisory responses.
This marks fraud as one of the few areas where regulators signalled the possibility of more oversight, not less.
