U.S. Treasury Secretary Janet Yellen is asking Congress to enact new legislation specifically tailored for cryptocurrencies in hopes of countering systemic risks not covered by existing laws.
“Congress should pass legislation that provides for regulation of the spot market for stablecoins and crypto assets that are not securities,” Yellen said during a House Financial Services Committee (HFSC) hearing on Tuesday.
Acknowledging that current rules and regulations should also be enforced, Ministers noted that digital assets are becoming increasingly common in national financial institutions, including the volatility of exchanges and stablecoin providers' 'runs' and the trademarks of crypto markets. listed various factors that could affect the stability of
Yellen has long called for a new regulatory framework for stablecoins, citing concerns about their growth as a payment method and their use for money laundering.
But bipartisan gridlock within Congress has kept all forms of crypto legislation moving at a snail's pace, with Democrats often questioning whether crypto deserves the dedicated focus of Capitol Hill in the first place. I have doubts.
Meanwhile, the country's two chief market regulators are still unable to agree on which crypto assets fall under their jurisdiction under current law. The Securities and Exchange Commission (SEC) has taken the position that virtually all cryptocurrencies are securities, and is suing Coinbase and other major crypto exchanges based on that premise.
Yellen's comments may reflect a difference of opinion at the SEC. The agency's president, Gary Gensler, maintains that the current law is sufficient and that crypto industry leaders are simply “choosing” not to follow the law.
When asked about this by HFSC Chair Patrick McHenry, Yellen said: “There are many areas where we have clear regulatory authority when it comes to digital assets, but we have identified some gaps.” Stated.
“For example, the CFTC has no supervisory regulatory authority over spot markets for products like Bitcoin,” he added. To date, Bitcoin (BTC) is the only cryptocurrency that all relevant government departments agree is not a security.
Regarding stablecoins, Yellen said federal regulators should be able to shut down stablecoin issuers that don't meet national “regulatory floors” and create regulatory protections for stablecoin wallet holders. He said it was “important.”
Tether, the world's largest stablecoin issuer, has issued USDT tokens backed by nearly $100 billion across all blockchains.
Edited by Ryan Ozawa.
