Treasury Secretary Janet Yellen appeared on Capitol Hill on Tuesday to advocate for lawmakers to act immediately to create federal regulatory standards for the cryptocurrency industry.
“While there are many areas where we have clear regulatory authority when it comes to digital assets, there are also some gaps,” Yellen, who also chairs the Financial Stability Oversight Council (FSOC), told the House Financial Services Committee. We are confirming it.”
“Bridging those gaps would be very helpful to Congress,” Yellen added.
read more: Washington should not succumb to crypto panic
Yellen told lawmakers that crypto assets carry risks, pointing to the potential for trading on digital asset platforms and their “vulnerability to price fluctuations in crypto assets.” Chairman Patrick McHenry, RN.C., noted that the House has developed two bipartisan bills, one on stablecoins and one on crypto market structure. At the time, Yellen said those efforts had failed.
“Stablecoins pose risks to the financial system that both the FSOC and the President’s Task Force on Financial Markets recognize can become significant over time, and that the “We very much welcome Congress's efforts to create a regulatory framework that will ensure the right regulatory framework,” Yellen said.
Some states, including New York and Wyoming, have taken steps in recent years to develop their own regulatory guidelines for stablecoin issuers. The Stablecoin Payment Transparency Act, supported by Republicans and some Democrats on the committee, retains power for state regulators, but Yellen has argued that federal policy is needed.
read more: 2024 will be the year of stablecoins
“FSOC believes it is important to have a federal regulatory floor that applies to all states,” she said. “Federal regulators should have the authority to determine whether stablecoin issuers should be prohibited from issuing such assets.”
Yellen's comments were made as part of lawmakers' annual hearing to consider the FSOC's annual report, released late last year. He identified digital assets as a risk to financial stability and called on Congress to give federal agencies the authority to regulate spot markets. Yellen is expected to appear before the Senate later this week to scrutinize the same report.
The House Financial Services Committee held a hearing last month to discuss the “regulatory whiplash” created by the “FSOC's ever-changing” framework around innovation.
“During this Congress, our committee reiterated the repeated aggressiveness of certain Biden financial regulators in seeking to take aggressive agency action against disadvantaged industries through guidance, rulemaking, oversight, and enforcement. ,” said Financial Services Digital Assets Subcommittee Chairman French Hill (R-Ark.). said at the public hearing.
McHenry’s Stablecoin Payments Clarification Act passed the committee, but is not scheduled for a vote on the full floor. The Financial Innovation and Technology for the 21st Century Act, which focuses on market structure and the division of responsibilities between federal agencies, also passed the committee with low approval ratings and is expected to be sent to the floor soon. There isn't.
Don't miss the next big story – join our free daily newsletter.
