U.S. Treasury Secretary Janet Yellen is poised to address Congress on the potential risks posed by the crypto industry to the financial system on Feb. 6.
Yellen's prepared remarks, which have been shared ahead of her appearance, outline a broad range of financial system risks, with a particular focus on the challenges and uncertainties presented by digital assets, including stablecoins and the volatility of crypto-asset prices.
Digital assets in the spotlight
A significant portion of Yellen's testimony is dedicated to the challenges posed by the burgeoning digital asset sector.
She identifies specific risks including potential runs on crypto-asset platforms, vulnerabilities due to crypto-asset price volatility, and the regulatory challenges presented by platforms operating outside established legal frameworks.
Yellen's remarks underscore the urgent need for comprehensive regulatory oversight of digital assets, including the enactment of legislation aimed at regulating stablecoins and the spot market for non-security crypto-assets.
Economic recovery and financial stability
Yellen's testimony is expected to paint a picture of a resilient U.S. economy, bolstered by historic recovery efforts over the past three years.
With GDP growth robust and inflation on a downward trajectory, the Treasury Secretary will highlight achievements such as a healthy labor market, increased real wages, and a significant rise in household median wealth.
These successes, she argues, are underpinned by a strong and resilient financial system.
Yuri Molchan
Arman Shirinyan
