US Treasury Secretary Janet Yellen said the Treasury Department is not responsible for “quarterbacking” between the CFTC and the SEC regarding their opposing positions on crypto regulation.
Yellen made the statement during a July 9 hearing before the House Financial Services Committee.
Opposing views
House Financial Services Committee Chairman French Hill said the SEC and CFTC have taken opposing legal positions in federal court on crypto and asked whether the Treasury Department’s Financial Stability Oversight Council (FSOC) is working to unify the two regulators .
Hill said the council is “supposed to be a financial risk quarterback.” However, Yellen disagreed, stating:
“It is not the Financial Stability Oversight Council’s job to judge.”
She noted that the Treasury Department had published a report on crypto risks, which partly addressed risks arising from a lack of agreement among regulators.
Earlier in her testimony, Yellen told Hill that she remains committed to achieving a regulatory framework for digital assets and hopes the efforts “will come to a successful conclusion.”
Concentrated risk, Russian stablecoins
Yellen also responded to other questions related to crypto. Congressman Mike Flood asked Yellen whether decentralized trading protocols require a different approach to regulation than centralized services.
Yellen responded that the SEC and CFTC are investigating the matter, adding that some matters “may also fall under the banking agencies’ regulatory umbrella.”
Flood also wondered whether SEC regulations could reduce custody options for crypto. He asked Yellen whether a limited number of approved custodians available to registered investment advisors (RIAs) for Bitcoin ETFs would introduce concentrated risk.
The finance minister responded that the trend could pose a “potential” risk, but declined to answer with certainty without more details.
Congressman Brad Sherman commented on the Russian central bank’s plans to circumvent Western sanctions with crypto. Yellen said the Treasury Department is “very alert” to the use of crypto and stablecoins, but does not believe the Russian activities are substantial.