US Treasury Secretary Janet Yellen has called for a "tech-neutral" regulation of the crypto market that would focus on the risks it poses to consumers and businesses, not the technology itself.
In a speech at American University's Kogod School of Business' Center for Innovation on Thursday, Yellen gave her comments on cryptocurrency regulation, stablecoins, and CBDCs.
"Wherever possible, regulation should be 'tech neutral,'" the Treasury Secretary said. "Consumers, investors and businesses should be protected from fraud and misleading statements regardless of whether assets are stored on a balance sheet or distributed ledger."
Yellen noted that sovereign money is the core of a well-functioning financial system. "Stablecoins raise policy concerns, including those related to illicit finance, user protection, and systemic risk. And, they are currently subject to inconsistent and fragmented oversight. We are now working with Congress to advance legislation to help ensure stablecoins are resilient to risks that could endanger consumers or the broader financial system," the Treasury Secretary said.
Regarding CBDCs, Yellen stated that development and implementation of a central bank digital currency would take years, not months. A CBDC could still become a payment instrument just as reliable as regular currencies.
"The Administration will publish a report on the future of money and payments. The report will analyze possible design choices related to a potential CBDC and implications for payment systems, economic growth, financial stability, financial inclusion, and national security," the Treasury Secretary said.
Yellen noted that continuing to update and improve the US regulatory architecture would support US economic competitiveness and reinforce leadership in the global financial system. She also acknowledged the viewpoint that distributed ledger technology would transform other aspects of financial services like trading, borrowing, and lending.
The Treasury Secretary's speech followed Joe Biden's executive order on digital assets in early March, which called upon US government agencies to determine the advantages and disadvantages of cryptocurrencies, as well as risks posed by CBDCs and the digital dollar.
On Tuesday, the chairman of SEC Gary Gensler pledged to increase oversight over the crypto market to protect investors.
