Janet Yellen Calls for Crypto Regulation in Congressional Testimony, Citing Financial System Risks

Treasury Secretary Janet Yellen, successful her forthcoming quality earlier the House Financial Services Committee, is acceptable to stress the imaginable dangers the cryptocurrency manufacture presents to fiscal stability, advocating for legislative enactment to modulate integer assets effectively.

Treasury Secretary Janet Yellen Urges Congress to Act connected Crypto Regulation Amid Financial System Concerns

U.S. Treasury Secretary Janet Yellen is acceptable to talk connected the imaginable risks posed by the crypto manufacture to the fiscal system, including the instability of stablecoins, the information of runs connected crypto platforms, and the volatility of crypto-asset prices successful her grounds earlier the House Financial Services Committee connected Tuesday. Yellen’s prepared remarks, which were shared up of the session, spotlight the government’s expanding absorption connected integer assets arsenic a important country of concern.

Leading the Financial Stability Oversight Council (FSOC), a conjugation of national fiscal regulators tasked with ensuring the stableness of the country’s fiscal system, Yellen volition contiguous the council’s latest yearly study and explicit the request for legislative enactment to modulate the crypto sector.

Yellen remarks successful her prepared statement:

The assembly is focused connected integer assets and related risks specified arsenic from runs connected crypto-asset platforms and stablecoins, imaginable vulnerabilities from crypto-asset terms volatility, and the proliferation of platforms acting extracurricular of oregon retired of compliance with applicable laws and regulations.

This quality comes astatine a clip erstwhile the crypto manufacture continues to retrieve from high-profile setbacks, including the illness of the FTX exchange, which Yellen had antecedently likened to the “Lehman moment” for crypto, referencing the 2008 fiscal crisis-triggering autumn of Lehman Brothers.

Yellen’s connection emphasizes the request for Congress to walk authorities to code these concerns, peculiarly the regularisation of stablecoins and the spot marketplace for crypto-assets that are not classified arsenic securities. She states, “Applicable rules and regulations should beryllium enforced, and Congress should walk authorities to supply for the regularisation of stablecoins and of the spot marketplace for crypto-assets that are not securities.”

The FSOC’s 2023 yearly report, released successful December, had already pointed retired the terms volatility and interconnectedness wrong the crypto manufacture arsenic cardinal concerns. With Yellen’s testimony, the council’s stance connected the urgent request for regulatory measures becomes clearer, signaling a concerted effort to mitigate the systemic risks associated with integer assets.

Lawmakers are moving connected several pieces of legislation, focusing not lone connected stablecoins but besides connected broader marketplace operation issues and anti-money laundering measures.

Do you deliberation Yellen is successful favour of crypto regularisation that volition springiness regulatory clarity, but not stifle maturation and innovation? Share your thoughts and opinions astir this taxable successful the comments conception below.