United States Treasury Secretary Janet Yellen listed stablecoins as one of the major policy concerns in the digital asset space for regulators, currently subject to “inconsistent and fragmented oversight.”
Speaking to attendees at American University in Washington, D.C. on Thursday, Yellen said the Treasury Department was working with Congress to advance legislation to help ensure that “stablecoins are resilient to risks” for consumers and the U.S. financial system. According to the Treasury Secretary, while stablecoins raised “policy concerns” and issues around the coins’ reserve assets, many parts of the digital asset space present potential risks that could exacerbate inequality.
“Our regulatory frameworks should be designed to support responsible innovation while managing risks and especially those that could disrupt the financial system and the economy,” said Yellen. “As banks and other traditional financial firms become more involved in digital asset markets, regulatory frameworks will need to appropriately reflect the risks of these new activities. And new types of intermediaries such as digital asset exchanges and other digital native intermediaries — they should be subject to appropriate forms of oversight.”
Yellen cited a report from the President’s Working Group on Financial Markets released in November, which suggested that stablecoin issuers should be subject to “appropriate federal oversight” akin to that of traditional banks. She also raised concerns about the…