The Crypto Industry Needs Legislation, Highlighted Janet Yellen

In a congressional hearing on Tuesday, the US Treasury Department Secretary Janet Yellen focused on the need for strict rules and regulations in the crypto market. The increased risks associated with digital assets are mainly linked to the crypto-assets platforms, proliferation of platforms, and stablecoins.       

The Need for Regulations in the Crypto Market 

In a recent statement, Janet Yellen highlighted the requirement for Congress to pass rules and legislation that offer clarity to the crypto markets. 

Risks and challenges connected with the digital assets and digital market were highlighted by Yellen and requested measures. Crypto-asset platforms, stablecoins, and the proliferation of platforms performing outside regulations were focused by the Secretary.

Five major risks in the crypto market were highlighted by Yellen. The first risk was associated with the banking and non-banking financial institutions as both are the main source of capital in the financial market. The second risk was associated with climate-related financial stability challenges.

Yellen also highlighted the cybersecurity risks and requested bolstering protections. Increased use of Artificial Intelligence raised the cyber and model risk. Yellen requested Financial regulators, institutions, and market participants to monitor the area. The fifth risk highlighted by Janet was related to crypto-asset platforms, potential vulnerabilities, and stablecoins. 

Yellen also expected to look forward to continuing to engage with Congress on these issues. The head of policy at the Blockchain trade association Chamber of Digital Commerce, Taylor Barr confirmed the same via tweet on February 6. 

“Bipartisan FIT for the 21st Century Act, run by Representative French Hill join Janet Yellen for the crypto market restructuring”, added Taylor.  French Hill is one of the crucial parts of the crypto legislative environment and focuses on many factors of the crypto environment.

Recently, he highlighted the improvements in the crypto market when compared to the past two to three years. Additionally, the House of Representatives passed a comprehensive regulatory framework for cryptocurrencies. Additionally, Hill focused on the prudent process of stablecoins. 

Hill believes that addressing the significant issues persisting in the crypto market will help in bridging the regulatory gap and contribute to the digital asset market’s growth.

Other Lawmakers Supporting Alternative Legislations

The request of Yellen was welcomed by four Republican lawmakers and House members. All four members including Patrick McHenry, Glenn Thompson, French Hill, and Dusty Johnson signed the letter.

All the lawmakers agreed that the FSOC has uncovered a lack of regulations in specific areas and required strict laws for smooth functioning.

However, risks and challenges associated with the industry were identified, but FSOC failed to ensure consumer protection and digital asset innovation.   

Instead advocated for legislation, the Republican lawmakers called the Financial Innovation and Technology Act for the 21st Century, which proposes to develop clear roles and regulations along with consumer protections.

The bill was also supported by The Blockchain Association and CEO of Coinbase Brian Armstrong.  

Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.