US Treasury Secretary Janet Yellen reiterated the need for regulation in light of the recent turmoil in the crypto industry. The Secretary of the Treasury also mentioned two altcoin projects in his speech. Yellen also highlighted the need for a central bank digital currency.
Yellen referred to 2 altcoin projects while talking about regulations
US Treasury Secretary Janet Yellen reiterated on Wednesday the importance of establishing a regulatory framework for digital assets. Accordingly, Yellen described Terra as a possible danger. He also said that Tether ‘breaks the money’ as a result of the cryptocurrency crash.
cryptocoin.comAs you followed on , in the last market crash Terra ecosystem stablecoin Terra USD (UST) lost the dollar peg and crashed. LUNA, the other token of the ecosystem linked to the stablecoin, suffered a similar fate. Currently, Terra founder Do Known is under investigation in South Korea. South Korea even issued a red notice in this context. After the Terra collapse, calls for regulation have also increased in the industry. Janet Yellen especially reminds this, emphasizing the necessity of regulation.
However, there was also a winner in the collapse. This is the stablecoin Tether (USDT), which Yellen says ‘breaks the money’. With the collapse of the UST, suspicions towards algorithmic stablecoins have also increased. This brought Tether, which has reserve support and had no problems with the collapse, to the fore.
“The US needs to be in a position to issue one”
Janet Yellen, in her speech at the annual meeting of the International Monetary Fund (IMF), said that there may be “more regulation than people think” that can be applied to crypto. However, she noted there are many ‘vulnerabilities’ that need to be addressed first. Yellen acknowledged that digital finance is “something difficult to regulate.” She said she wanted to work with Congress on this to fill those gaps.
The US Treasury Secretary also shared his views on the US central bank digital currency (CBDC). Yellen stated that a CBDC has the advantage and potential to solve many problems. He stressed that the process of creating a CBDC takes many years, but is ‘definitely worth developing’. In line with this, Yellen made the following statement:
We can continue to consider whether the application is correct. However, the US needs to be in a position to issue one.
Meanwhile, last week, the Financial Stability Oversight Council (FSOC), of which Yellen and Fed Chair Jerome Powell are members, inter alia, issued a report asking Congress to step up to provide guidance on what the limits of securities regulation should be. published.
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