Janet Yellen Urges Congress to Enact New Crypto Laws
U.S. Treasury Secretary Janet Yellen is urging Congress to pass new legislation specifically tailored to address the unique risks posed by cryptocurrencies. During a hearing before the House Financial Services Committee, Yellen emphasized the need for regulations on stablecoins and the spot market for non-security crypto assets.
Concerns about Financial Stability
Yellen acknowledged that existing rules should be enforced, but highlighted the potential impact of digital assets on financial stability. She cited concerns such as “runs” on exchanges or stablecoin providers and the inherent volatility of the crypto market.
Long-Standing Call for Stablecoin Regulation
This isn’t the first time Yellen has called for a regulatory framework for stablecoins. She has expressed concerns about their growth as a payment method and their potential use in money laundering.
Congressional Deadlock and Regulatory Disagreements
However, progress on crypto legislation has been slow due to bipartisan deadlock in Congress. Additionally, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) disagree on which crypto assets fall under their jurisdiction based on current laws.
New Regulations Needed for Spot Markets
Yellen also emphasized the need for regulatory clarity in spot markets for commodities like Bitcoin. Currently, the CFTC does not have supervisory authority over these markets.
Federal Oversight and Stablecoin Holder Protections
In terms of stablecoins, Yellen advocated for a federal regulator to have the power to shut down issuers that do not meet regulatory standards. She also stressed the importance of creating protections for stablecoin wallet holders.
Hot Take: Yellen’s Push for Crypto Regulations
Janet Yellen’s call for Congress to enact new crypto laws reflects the growing recognition of the need to address the unique risks and challenges posed by digital assets. While progress has been slow, Yellen’s testimony highlights the importance of stablecoin regulation and regulatory clarity in spot markets. The diverging views within regulatory agencies further underscore the need for a comprehensive framework that can effectively address the evolving crypto landscape.
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