US Senator Elizabeth Warren has asked Treasury Secretary Janet Yellen to “emergency action” and adopt appropriate policies to address the risks posed by cryptocurrency. “The longer the U.S. waits to adjust the appropriate regulatory regime for these assets, the more likely they will become so intertwined in our financial system. If this market is under pressure, it may have potentially serious consequences.”
Senator Warren wants a quick regulatory response to crypto risks
US Senator Elizabeth Warren wrote to Treasury Secretary Janet Yellen on Monday, outlining many concerns about the risks posed by cryptocurrencies.
Warren wrote: “I am writing to you as Chairman of the Financial Stability Supervisory Board (FSOC) to discuss the need for a coordinated regulatory strategy to mitigate the growing risks that cryptocurrencies pose to the financial system.”
She explained that FSOC “is responsible for identifying and responding to emerging financial stability risks.” The senator from Massachusetts described:
In the absence of adequate supervision in the United States, I am increasingly worried about the dangers that cryptocurrencies pose to investors, consumers, and the environment.
Then she worried that “the demand for cryptocurrencies continues to grow, and these assets are increasingly embedded in our financial system.” She went on to outline some of the risks that cryptocurrencies pose to the U.S. financial system, hedge funds and other investment tools, including bank risks, Cyber attacks and the unique risks of stablecoins and decentralized finance (defi).
“The committee must determine whether these trends raise concerns beyond investor and consumer protection and extend to broader systemic vulnerabilities that may threaten financial stability,” Warren emphasized. “The policy response to the risks posed by these assets must be coordinated and integrated, rather than scattered among various financial institutions, which is critical.”
Senator Warren also proposed that FSOC “play a leading role in developing a comprehensive cryptocurrency regulatory system.”
She wrote, “I urge FSOC to take urgent action and use its statutory powers to address the risks of cryptocurrency and ensure the safety and stability of our financial system,” warned:
The longer the United States waits to adjust the appropriate regulatory regime for these assets, the more likely they will become so intertwined in our financial system that if this market is under pressure, it may have serious consequences.
Earlier this month, Senator Warren Call The U.S. Securities and Exchange Commission (SEC) “uses all its powers” to address cryptocurrency risks, stressing that “Congress must also step up to fill these regulatory gaps.”
What do you think of Senator Warren’s request for Treasury Secretary Yellen to take urgent action to reduce cryptocurrency risks? Let us know in the comments section below.
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