Yellen’s double standard: Treating cryptocurrencies as a risk while demanding clear crypto rules?
With the economy poised for significant growth ahead of the 2024 election, U.S. Treasury Secretary Janet Yellen will appear before the House Financial Services Committee today to outline the latest work of the Financial Stability Oversight Committee (FSOC).
According to a brief excerpt of Yellen’s testimony released Monday, she told Congress that the cryptocurrency industry poses a number of potential risks to the financial system, including the risks of stablecoins, the risks of running on cryptocurrency platforms, and price volatility. I would say I do.
With the government set to lay out clear rules if Congress fails to do so, Yellen issued a dire warning about what could happen if action is not taken.
Key topics to discuss
In today’s testimony, Yellen will highlight the growing adoption of AI in the financial sector, acknowledging its potential to reduce costs and improve efficiency, but stress the importance of stronger oversight of financial institutions and regulators.
Next on her list is cryptocurrency. Yellen will highlight FSOC’s concerns about potential market instability. Specific risks include running on crypto-asset platforms, vulnerability to price fluctuations, and the rise of platforms operating outside of legal and regulatory bodies.
But she will also state clear rules. Yellen added that Congress must pass legislation and applicable rules must be enforced. Lawmakers are preparing bills, including one focused on stablecoins and another focused on market structures more broadly. An anti-money laundering bill was also proposed. However, unlike Europe and Hong Kong, where clearer regulatory frameworks are emerging, uncertainty persists in the United States regarding rulemaking for these sectors.
Recently, the European Securities and Markets Authority (ESMA) published a consultation document seeking public feedback on setting standards under the Markets in Cryptocurrency Assets (MiCA) Regulations. At the same time, the EU proposes stricter rules for foreign cryptocurrency companies. Hong Kong has signaled an aggressive regulatory stance by mandating unlicensed cryptocurrency companies to cease operations by May 2024.
While other countries are making progress, the United States is lagging behind in terms of clear rules. Without rules, we only talk about risk.
YouTuber and cryptocurrency expert Wendy O said in her Likewise, Yellen will follow Warren’s lead in blaming crypto assets for the banking collapse, but Wendy believes the real threat is US officials, not cryptocurrencies.