US Treasury Secretary Janet Yellen believes stablecoins can improve efficiency and facilitate payments, but require proper regulation.
Speaking to the Senate Banking Committee, US Treasury Secretary Janet Yellen said stablecoins “pose significant risks, including risks to payment systems and risks associated with a concentration of economic power.” Therefore, stable cryptocurrencies require proper regulation.
Senator Patrick Toomey also asked Yellen how she felt about the updated leadership of the Financial Action Task Force on Money Laundering (FATF). The Treasury Minister said she endorses the FATF’s recommendations for regulating cryptocurrency companies that do not provide custody or control of users’ digital assets.
She noted that the updated recommendations of the US Financial Crimes Enforcement Network (FinCEN) are in line with the rules published by the FATF. In the updated guidance, the FATF clarified that its intention was not to regulate companies or individuals that “only provide ancillary services or products to the blockchain,” such as hardware manufacturers, cryptocurrency wallet operators, software developers or miners.
Janet Yellen is not a cryptocurrency advocate. In October, the US Treasury Secretary proposed a tax on unrealized capital gains. This will force investors to pay for the growth of the rate of cryptocurrencies, even those that are passively in the wallet. In February, Yellen expressed concern that cryptocurrencies are increasingly being used to trade drugs.
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