Yellen Advocates for Increased Regulation of Cryptocurrency by US Treasury Department
Amid mounting legal cases against prominent cryptocurrency platforms Coinbase and Binance, US Treasury Secretary Janet Yellen has emphasized the need for stronger regulation to protect cryptocurrency users and investors.
Treasury Secretary Janet Yellen made some remarks on CNBC’s Squawk Box, publicly supporting US financial regulators, including the SEC and CFTC, in their quest to keep digital currency users and investors safe. This comes in the background of recent legal cases against crypto giants Coinbase and Binance.
But she did not make any specific comments on these individual lawsuits.
Interestingly, her statements align with a report from the Financial Stability Oversight Board (FSOC), where she also serves as chair. Last October, the FSOC stated that cryptocurrencies, under certain circumstances, could threaten the financial stability of the United States.
Yellen believes there are loopholes in current encryption regulations that need to be filled. She expressed her desire for Congress to step in and create stricter regulations for crypto companies. According to Yellen, a collaborative approach between the Treasury Department and Congress can lead to more effective legislation.
In terms of crypto legislation, Congress hasn’t had much luck so far. No bill has yet become law. The lack of progress has been attributed to the apparent partisan divide on cryptocurrency-related matters.
A bill recently introduced by Republican Representatives Patrick McHenry and Glenn Thompson may bring some progress in the ongoing CFTC and SEC dispute over whether tokens are securities or commodities. If passed, this law would allow token issuers to push for their currencies to be recognized as commodities.
Attention has also been drawn towards CBDCs. Two separate bills aimed at halting the advance of CBDCs have been introduced, both backed by Republicans.
The Digital Dollar Experiment Prevention Act, introduced by Rep. Alex Mooney, has 16 participants, all Republicans. And the state’s CBD Anti-Surveillance Act, proposed in February by Rep. Tom Emmer, has 31 participants — also all Republicans.
When it comes to stablecoins, bills have been proposed by both sides of the aisle, but even bipartisan bills have a hard time getting them through the necessary committees for a vote.
One such example is the Responsible Financial Innovation Act, which was introduced last year by Sens. Cynthia Loomis and Kirsten Gillibrand. Its goal is to legally integrate digital assets into the US system, but it has yet to be reintroduced in the new Congress.