Janet Yellen, the US Treasury secretary, told lawmakers that Congress must address gaps in regulation of digital assets, some of which could pose risks either to investors or the financial system.
At a Feb. 6 hearing on the Financial Stability Oversight Council's annual report, House Financial Services Committee Chairman Patrick McHenry asked Yellen about her views on pending legislation aimed at addressing stablecoin concerns and regulatory transparency in the cryptocurrency space. The Treasury Secretary called the regulation “critical” in certain areas, including protecting wallet holders and overseeing stablecoin issuers.
“There are many areas regarding digital assets where we have clear regulatory authority, but we have identified some gaps where, to protect consumer investors and address financial stability risks, Congress would benefit from taking action to address them. gaps,” Yellen said.
The Treasury Secretary pointed to the Commodity Futures Trading Commission (CFTC), saying it does not have “regulatory oversight” over spot market commodities related to Bitcoin (BTC). She said stablecoins pose risks to the US financial system, insisting on a “federal regulatory level” applicable to all US states rather than the current state-by-state approach.
“A federal regulator should be able to decide whether a stablecoin issuer should be prohibited from issuing such an asset.”
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Yellen's remarks echoed previous public comments from the Treasury secretary, in which she called for a robust regulatory framework to govern cryptocurrencies in the United States. In July 2023, the House Financial Services Committee passed the 21st Century Financial Innovation and Technology Act and the Stablecoin Payments Clarity Act. Both bills await a full vote in the House.
Representative McHenry, who has chaired the House Financial Services Committee since January 2023, is set to leave his post in 2025 after announcing that he does not plan to seek re-election. The impact of his departure on digital asset regulation is unclear.