Yellen To Senate Banking Committee: Stablecoins Should Be Regulated – Fin Tech

Earlier this week, Department of the Treasury Secretary Janet
Yellen provided testimony and responded to
questions from the Senate Banking Committee regarding volatility in
cryptocurrencies that are designated to be “stablecoins,”
meaning that the value is supposed to remain fixed, on a one-to-one
basis with the dollar, and emphasized that a federal framework for
regulating digital assets is necessary to avoid “risks to financial stability,” as
reported by The Wall Street Journal.

In December 2021, the Financial Stability Oversight Council
(“FSOC”) addressed the potential risks to financial
markets that cryptocurrencies and digital assets present in
its 2021 Annual Report, and in her comments regarding that report, Yellen
highlighted FSOC’s conclusion that “regulatory attention
and coordination regarding stablecoins and other crypto
assets” is of critical importance. These messages are all
consistent with the Biden administration’s position, as
articulated in the Executive Order issued on March 9, 2022,
that strong steps must be taken “to reduce the risks that
digital assets could pose to consumers, investors, and business
protections [as well as] financial stability and financial system
integrity.” 

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