Treasury Secretary Janet L. Yellen is scheduled to outline significant concerns surrounding artificial intelligence and digital assets before the U.S. House of Representatives Financial Services Committee on Tuesday.
Yellen In a statement, he noted that the increasing adoption of artificial intelligence in the financial sector requires caution. While AI promises to reduce costs and improve efficiency in financial services, Yellen emphasized the need for increased oversight by financial institutions and regulators.
Concerns about AI and virtual currency
He also highlighted the Financial Stability Oversight Council's concerns about potential market instability regarding digital assets. He cited specific risks, including the dangers of execution on crypto asset platforms, vulnerabilities resulting from price fluctuations in crypto assets, and the growth of platforms that operate without adhering to regulatory standards.
Yellen called for enforcement of existing regulations and urged Congress to pass new legislation aimed at regulating the spot market for stablecoins and crypto assets not classified as securities. He called for cooperation with Congress, but he feels the U.S. remains in a state of constant uncertainty when it comes to rulemaking in these areas.
Other countries take the lead
In contrast, the European Securities and Markets Authority (ESMA) has recently made progress in this area with the publication of two advisory papers. These documents seek public feedback on the establishment of standards and guidelines under the Markets in Cryptoassets (MiCA) Regulations. In a move that signals a more aggressive regulatory approach, the EU has proposed stricter rules for foreign crypto companies.
Meanwhile, Hong Kong has taken a firm stance on the issue. The region requires unlicensed crypto companies to cease operations by May 2024, demonstrating the need for specific guidelines despite being a “crypto hub” .
However, U.S. digital asset regulation remains uncertain. While other global institutions have moved forward with clearer mandates and frameworks, the United States continues to cycle through redundant cycles of risk commentary without making concrete progress to counter the risks.
Also read: Robert Kiyosaki slams Jerome Powell and Janet Yellen in defense of Bitcoin
