US Treasury Secretary Janet Yellen is set to address Congress on the potential risks the cryptocurrency industry poses to the financial system on February 6.
US Treasury Secretary Janet Yellen is set to address Congress on the potential risks the cryptocurrency industry poses to the financial system on February 6.
Yellen is ready commentsthat were shared before its appearance, describe a wide range of risks to the financial system, with special attention to the challenges and uncertainties presented by digital assets, including stablecoins and the price volatility of cryptoassets.
Digital assets in the spotlight
A significant portion of Yellen’s testimony is dedicated to the challenges posed by the burgeoning digital asset sector.
It identifies specific risks including potential runs on cryptoasset platforms, vulnerabilities due to cryptoasset price volatility, and regulatory challenges presented by platforms operating outside established legal frameworks.
Yellen’s comments underscore the urgent need for comprehensive regulatory oversight of digital assets, including enacting legislation aimed at regulating stablecoins and the spot market for worthless cryptoassets.
Economic recovery and financial stability
Yellen’s testimony is expected to paint a picture of a resilient U.S. economy, buoyed by the historic recovery efforts of the past three years.
With robust GDP growth and inflation on a downward trajectory, the Treasury Secretary will highlight achievements such as a healthy labor market, higher real wages, and a significant increase in median household wealth.
These successes, he maintains, are supported by a strong and resilient financial system.
