United States Secretary of the Treasury Janet Yellen known as on U.S. lawmakers to develop a “constant federal framework” on stablecoins to handle dangers to monetary stability.
In a Tuesday listening to of the Senate Banking Committee on the Financial Stability Oversight Council Annual Report to Congress, Yellen reiterated her earlier place calling for a regulatory framework on stablecoins, citing a November report from the President’s Working Group on Financial Markets. In addition, the Treasury Secretary commented on TerraUSD (UST), the third-largest stablecoin by market capitalization, dropping to $0.67 within the final 24 hours.
“I think [the situation with TerraUSD] simply illustrates that this is a rapidly growing product and that there are risks to financial stability and we need a framework that’s appropriate,” stated Yellen.
Addressing inquiries to Yellen, Pennsylvania Senator Pat Toomey additionally identified that UST was an algorithmic stablecoin, “not backed by cash or securities.” The Treasury Secretary added it could be “highly appropriate” to purpose for a “constant federal framework” on stablecoins by the top of 2022 given the expansion of the market. She known as for bipartisanship amongst members of Congress to enact laws for such a framework.
In her written testimony for the listening to, Yellen stated the Financial Stability Oversight Council was engaged on a report in compliance with United States President Joe Biden’s government order on digital belongings, figuring out potential dangers to monetary stability in addition to any gaps in regulatory oversight. The order known as for a number of authorities businesses to coordinate and consolidate coverage as a part of efforts to develop a nationwide framework on crypto.
Related: Secretary Yellen acknowledges ‘benefits of crypto’ regardless of lingering skepticism
Serving as Treasury Secretary within the Biden administration since January 2021, Yellen has beforehand stated cryptocurrencies signify a “particular concern” for the federal government division, associating many token tasks with “illicit financing” and cash laundering. Many of her current public statements on coverage regarding the crypto house appear to have targeted on stablecoins and establishing an acceptable regulatory framework.