US Treasury Secretary Yellen emphasized the urgency of implementing strong regulatory measures for cryptocurrencies during a recent congressional hearing on February 6th. This is to reduce the risks that digital assets may pose to investors and the broader financial system.
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Yellen emphasizes the need to supervise stablecoin issuers
Different states call for a unified regulatory approach
Progress in US stablecoin legislation
Stablecoin bill nearing completion
The discussion centered around the annual report of the Financial Stability Oversight Council, in which Patrick McHenry, the Chairman of the House Financial Services Committee, asked Yellen for her views on proposed legislation aimed at strengthening stablecoin governance and clarifying the regulatory framework for cryptocurrencies.
Yellen emphasized the importance of regulation in critical areas, particularly in protecting digital wallet holders and overseeing stablecoin issuers.
Yellen stated, “We have clear regulatory authority in many areas concerning digital assets, but we have identified some gaps that Congress taking action to fill would be helpful for consumer investor protection and addressing financial stability risks.”
Yellen specifically highlighted the lack of comprehensive regulatory power of the Commodity Futures Trading Commission (CFTC) over spot markets for commodities like Bitcoin and pointed out the potential systemic risks that stablecoins pose to the US financial infrastructure. She advocated for a standardized federal regulatory framework to replace the current fragmented interstate regulations.
Yellen’s position on the need for stablecoin issuers to have a federal regulatory floor aligns with her consistent theme of advocating for clear regulatory boundaries for cryptocurrencies in the US. This action echoes previous public statements by the Treasury Secretary, urging the establishment of a robust regulatory framework for the cryptocurrency field.
The push for clearer regulation has made some progress, as the House Financial Services Committee passed the 21st Century Financial Innovation and Technology Act and the Payment Stablecoin Clarity Act in July 2023.
These bills are now awaiting a full House vote, indicating significant progress that could be made in pursuing regulatory clarity and investor protection in the digital asset space.
According to Representative Maxine Waters, in an interview with Politico, the stablecoin bill is very close to completion. House Financial Services Committee Chairman Patrick McHenry has been actively pushing for this bill for the past 20 months.
Stablecoin
United States
Yellen
Further reading:
Bitcoin ETFs and ETPs | Circle: If approved in the US, it will overshadow a variety of Bitcoin investment products in the EU.
US Treasury Department seeks expanded enforcement tools, sanctions authority, targeting “US dollar stablecoin issuers”.