Treasury Secretary Yellen Urges Congress to Address Regulatory Gaps in Cryptocurrency Sector
Summary:
U.S. Treasury Secretary Janet Yellen urged Congress to address the gaps in digital asset regulation during a hearing on February 6, expressing concerns about potential risks to investors or the financial system. She emphasized the CFTC's lack of authority over Bitcoin-related spot market commodities and the risks stablecoins posed to the U.S. financial structure. Pointing out areas with clear regulatory authority and gaps, Yellen underscored the need for consistent federal regulation. This comes as part of her ongoing call for a comprehensive regulatory framework to govern cryptocurrencies in the U.S.
In her recent address to legislators, Janet Yellen, The U.S. Treasury Secretary, emphasized the importance of tackling loopholes in the regulation of digital currencies. She stated these gaps potentially jeopardize either the investors or the financial structure of the nation. During a Feb. 6th review of the Financial Stability Oversight Council's annual statement, House Financial Services Committee head Patrick McHenry solicited Yellen's opinion on the upcoming laws centered around stablecoins and the regulatory definiteness of the cryptocurrency domain. Yellen underscored regulation as a crucial tool, particularly in areas which include the safeguarding of wallet holders and monitoring of stablecoin issuers.
"There are numerous sectors pertaining to digital assets where regulatory jurisdiction is well-established, however, we have recognized certain areas with shortcomings, particularly in the spheres of consumer and investor security, or for mitigating financial stability risks. Therefore, it is essential for Congress to intervene to rectify these shortcomings," Yellen commented.
At the Feb. 6 House Financial Services Committee hearing, Yellen highlighted the limitations of the Commodity Futures Trading Commission (CFTC) and its lack of "oversight regulatory jurisdiction" over Bitcoin-related spot market commodities. She added that stablecoins often pose threats to the U.S. financial structure, thus encouraging the need for a universal "federal regulatory standard" across all U.S. states, superseding the existing state-specific approach.
She asserted that a federal regulatory body should hold the authority to determine whether a stablecoin issuer should be restricted from releasing such assets.
Yellen's statements echo her earlier public assertions, calling for a comprehensive regulatory scheme to oversee cryptocurrencies in the United States. In July 2023, the House Financial Services Committee approved the Financial Innovation and Technology for the 21st Century Act and the Clarity for Payment Stablecoins Act. Both Acts are waiting for a comprehensive vote in the House.
Patrick McHenry, the current chairman of the House Financial Services Committee since January 2023, announced his intention not to rerun for office, leading to his departure in 2025. The repercussions of his exit on the regulation of digital assets remain uncertain. The recent proposed cryptocurrency regulations in the US have been driven by legislators' apprehensions and uncertainty.
Published At
2/6/2024 10:49:17 PM
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