U.S. Treasury Secretary Janet Yellen has called for increased oversight of cryptocurrency and stablecoins in the final report of the Financial Stability Oversight Council (FSOC) under the Biden administration.
Yellen stressed that digital assets are posing increasingly large risks to the U.S. financial system while calling for the implementation of a comprehensive regulatory framework to address these issues.
"The Council continues to call for the enactment of legislation to establish a prudent federal regulatory framework for stablecoin issuers and cryptocurrency assets, in order to address the risks we have identified."
Janet Yellen – U.S. Secretary of the Treasury
While acknowledging the benefits that digital assets bring, she also pointed out the vulnerabilities and challenges, including cybersecurity threats and potential risks to the financial system.
Yellen, who has been skeptical about cryptocurrency, has expressed concerns that these assets could be used in illegal activities and threaten global financial stability. In 2021, she particularly emphasized the risks associated with illegal transactions conducted via cryptocurrency.
This report was released as Yellen's final contribution before the Trump administration took office on January 20. The new administration is expected to have a more supportive stance toward cryptocurrency, as Trump appointed former PayPal executive David Sacks as the White House 'AI and crypto Czar.'
Additionally, Trump also nominated hedge fund manager Scott Bessent as Treasury Secretary, who will succeed Yellen.
