Yellen Goes Rogue, Tackles the Cryptocurrency Industry, Suggests Strict Regulations
Congress will hear from Treasury Secretary Janet Yellen on the possible threats that cryptocurrencies could pose to the integrity of the financial system. Yellen used to talk about the advantages of cryptocurrencies, but these days, she is more concerned with dealing with the risks and difficulties that come with them.
Yellen acknowledged in her first statements from January 2021 that cryptocurrencies could improve the financial system’s resiliency and efficiency. Her remarks were interpreted as deviating from regulatory bodies customarily cautious stance on digital assets.
Yellen’s change of attitude is linked to the growing number of Irregularities being carried out in the cryptocurrency industry, which is fast becoming more apparent. It is unlikely that Yellen’s speech will make people less excited about digital assets in general. Yellen had accused the ongoing Irregularities in the shallow legislative framework and urged Congress to look into it.
Yellen’s Comments Coincidences With Global Regulatory Bodies’ Investigation
It is anticipated that Yellen will address important cryptocurrency-related concerns in her speech before Congress. These worries can include the erratic nature of cryptocurrency values, the possibility of manipulating the market, and the dangers of money laundering and other illegal activity.
In order to handle these issues and guarantee the integrity of the financial system, Yellen stressed the importance of strict regulatory control. The Treasury Secretary’s admonitions coincide with increased global regulatory bodies’ investigations of the bitcoin industry. Yellen’s statement may also impact the course of United States regulatory policy on cryptocurrency.
The Biden administration has made it clear that it wants to close regulatory loopholes and improve market supervision for cryptocurrencies in order to defend investors and maintain financial stability. It is anticipated that Yellen’s testimony before Congress will shed further light on the administration’s strategy for regulating digital assets.
Yellen Comments Examined, Experts Throws More Light
Commenting on the topic, Steven Walgenbach from Inside Bitcoin says that the comments made by the Treasury Secretary might affect the larger cryptocurrency market, which has seen a lot of volatility lately. Walgenbach added that Yellen’s cautions against the dangers of cryptocurrencies could exacerbate market volatility and sow further doubt.
Alex Dovbnya, a cryptocurrency analyst with U Today, said that Yellen’s view may be justified considering the increasing inflation and the downward trajectory experienced in the United States economy in recent times.
This will be one of the most important topics at the next FSOC meeting, which is expected to act as a legislative proposal that is targeted at reversing a “staff bulletin” from the United States Securities and Exchange Commission (SEC). The staff bulletin, also called SAB 121, was introduced in March 2022 and requires cryptocurrency companies to show these holdings as a firm of liabilities on their financial statements.
Meanwhile, The Government Accountability Office (GAO), sometime last year, identified the major mistakes when it called out SEC for overstepping its boundaries. SEC is said to have introduced staff guidance into it’s operations, as a way of assisting and clarifying in the policy interpretation process.
More Strict Policies for the Cryptocurrency Industry as Yellen Meets FSOC
Yellen’s cautions have been explained as highlighting the necessity of regulatory monitoring and attention in order to handle the difficulties presented by digital assets and promote competition and innovation.
Yellen is expected to appear before the House Financial Services Committee on the next schedule to share her activities and thoughts with the Financial Stability Oversight Council (FSOC).
The FSOC is made up of heads of different financial agencies that are that are targeted at preventing future financial crises. Yellen, in her testimony, pointed out some illegitimate activities in the cryptocurrency platform that have created provisions for cryptocurrency price volatility, which has had too many casualties.
She also pointed out the increase in the number of these platforms and how they have been acting outside the state-stipulated laws. Yellen went ahead to recommend more enforceable strict regulations, urging Congress to pass a law that provides proper regulation for both spot ETF markets and stablecoins that are not considered securities.
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