Benzinga - During a House Financial Services Committee hearing, U.S. Treasury Secretary Janet Yellen urged Congress to introduce specific legislation aimed at the cryptocurrency market to address potential risks not covered by current financial laws.
What Happened: Yellen stressed the need for regulatory measures, particularly for stablecoins and the crypto spot market that are not classified as securities. "Congress should pass legislation to provide for the regulation of stablecoins, and of the spot market for crypto assets that are not securities," said Yellen.
The Treasury Secretary has been advocating for a revamped approach to regulating stablecoins for quite some time, highlighting the potential misuse for payments and money laundering. Despite her persistent calls, legislative movements on cryptocurrency regulations have been slow, hindered by a divided Congress.
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Why It Matters: It should be noted that the SEC, headed by Gary Gensler, considers most cryptocurrencies to be securities and has taken legal action against exchanges like Coinbase under that assumption.
Contrarily, Yellen noted the need to address regulatory “gaps,” acknowledging that the Commodities Futures Trading Commission (CFTC) lacks authority over the spot markets of commodities, with Bitcoin (CRYPTO: BTC) being the only cryptocurrency recognized as a non-security by most government divisions.
Yellen proposed that, for stablecoins, a federal regulator should have the power to close down issuers not meeting national standards. She also called for the guaranteed regulatory protection of individuals holding stablecoins in wallets. This comes as the leading stablecoin issuer, Tether, has produced close to 100 billion USDT tokens, linked to the U.S. dollar, across various blockchain platforms.
Photo by Alexandros Michailidis on Shutterstock
Price Action: Bitcoin was trading at $42,991, up 0.26% in the last 24 hours, according to Benzinga Pro.
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