For Digital Assets, Trust Is the Difference
Innovation only works when people trust the system behind it.
For generations, America's banking system has powered economic growth by safely moving money, protecting consumers, and supporting lending to families, small businesses, farmers, and communities. That trust did not happen by accident. It was built through clear rules, strong oversight, and accountability when institutions fall short.
Digital assets may create opportunities to improve payment efficiency, expand access, and develop new financial products. But new technology does not eliminate the need for safeguards. Responsible innovation requires consumers to understand the risks they are taking, the protections they have, and who is accountable when something goes wrong.
Cryptocurrencies do not come with the same protections as a bank account or a credit card
Digital assets are not all alike. The protections available to a consumer can depend on whether an asset is held through a custodian or in a self-hosted wallet, whether the provider is subject to federal or state oversight, and whether the transaction involves an investment, a payment, or another financial service.
The Federal Trade Commission (FTC) cautions that cryptocurrency held in an account generally is not insured by the government in the same way that eligible deposits at an FDIC-insured bank are. If a wallet provider fails or is hacked, consumers may not have a government guarantee that their funds will be restored. The FTC also warns that cryptocurrency payments typically do not carry the same reversal and dispute mechanisms available for many credit-card transactions. Once the money is gone, it's gone.
The Consequences Are Already Real
The risks are not theoretical. According to the FBI's 2025 Internet Crime Report, Americans who submitted complaints involving cryptocurrency "reported the highest losses, with 181,565 complaints totaling more than $11 billion." This scale underscores why consumer protection, fraud prevention, and effective enforcement must remain central to digital-asset policy.
Research from the Federal Reserve Bank of New York has also identified operational vulnerabilities within the digital asset ecosystem, including "fraud, scams, hacks, and bugs" that are exacerbated by automation and decentralization.
The conclusion is clear: Digital assets may offer new opportunities, but innovation without strong safeguards can expose consumers to significant financial harm. Building trust in the sector will require clear rules, effective oversight, and meaningful protections against fraud and operational failure.
Innovation Should Move Forward—With Guardrails
New financial technologies can make payments faster, expand access, and create new opportunities. But innovation cannot be a substitute for trust.
Policymakers should preserve the benefits while establishing clear expectations for disclosures, risk management, consumer protection, and accountability.
Federal Reserve Vice Chair for Supervision Michelle Bowman recently described the proper balance: "Rapidly evolving technologies offer significant benefits and present complex challenges for the financial sector." She added that supervisors should support responsible innovation while continuing to address material risks.
The principle is straightforward: Innovation works best when paired with accountability. The banking system has earned trust because it is regulated, supervised, and accountable. Crypto should be expected to earn trust the same way.
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