US Treasury Secretary Janet Yellen wants Congress to take action on crypto.
Testifying before the House Committee on Financial Services on Tuesday, Yellen outlined the ongoing areas of focus for the Financial Stability Oversight Council (FSOC) in 2024.
The FSOC is a Treasury Department mission to identify and assess emerging threats to U.S. financial stability.
In her speech, Yellen said the FSOC is concerned that crypto and stablecoins could pose potential risks to the financial system as the asset class is largely unregulated.
“The Council focuses on digital assets and associated risks, such as the operation of crypto asset platforms and stablecoins, potential vulnerabilities due to the price volatility of crypto assets, and the proliferation of platforms that trade outside or in violation of applicable laws and regulations. Applicable rules and regulations must be enforced, and Congress must enact legislation to provide for the regulation of stablecoins and of the spot market for crypto assets that are not securities. We look forward to continuing to discuss this with Congress.”
Yellen also said that the FSOC plans to focus on the risks of the banking sector and non-bank financial institutions.
“It supports member agencies’ plans to assess whether capital measures appropriately reflect a banking institution’s ability to absorb losses; improve resolvability at large, complex or interconnected banks; and addressing vulnerabilities arising from the level of uninsured deposits and the composition of depositors.
Non-bank financial institutions are an important source of capital in the financial markets, but also in the financial markets pose potential risks to the financial system, including risks related to liquidity mismatches lever.”
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