Regulation
Janet Yellen Says Treasury Is Not Responsible for SEC-CFTC ‘Fights’ Over Cryptocurrency Rules
United States Secretary of the Treasury Janet Yellen said the Treasury was not responsible for “negotiations” between the CFTC and the SEC regarding their opposing positions on cryptocurrency regulation.
Yellen made the statement at a press conference on July 9. audience before the House Financial Services Committee.
Opposing positions
House Financial Services Committee Chairman French Hill said the SEC and CFTC have taken opposing legal positions in federal court on crypto and asked whether the Treasury’s Financial Stability Oversight Council (FSOC) is working to unite the two regulators.
Hill said the board is “supposed to be the guarantor of financial risk.” However, Janet Yellen disagreed, saying:
“It is not the role of the Financial Stability Oversight Council to decide.”
She noted that the Treasury had released a report on the risks of cryptocurrencies, addressing in part the risks arising from a lack of agreement among regulators.
Earlier in her testimony, Yellen told Hill that she remained committed to establishing a regulatory framework for digital assets and hoped the efforts would “come to a good conclusion.”
Concentrated risk, Russian stablecoins
Yellen also answered other questions related to cryptocurrencies. Congressman Mike Flood asked Yellen whether decentralized trading protocols require a different regulatory approach than centralized services.
Janet Yellen responded that the SEC and CFTC were studying the issue and added that some issues “may also fall within the regulatory jurisdiction of the banking agencies.”
Flood also questioned whether SEC regulation could reduce custody options for cryptocurrencies. He asked Yellen whether a limited number of approved custodians were available to registered investment advisers (RIAs) for Bitcoin ETFs would introduce concentrated risk.
The Treasury secretary responded that the trend could pose a “potential” risk, but declined to answer with certainty without further details.
Congressman Brad Sherman Janet Yellen commented on the Russian central bank’s plans to circumvent Western sanctions through cryptocurrencies. Janet Yellen said the Treasury is “very attentive” to the use of cryptocurrencies and stablecoins, but does not believe Russia’s activities are substantial.