Janet Yellen Advocates for Increased Crypto Regulation and AI Awareness
In her appearance before the Senate Banking Housing and Urban Affairs Committee, Treasury Secretary Janet Yellen urged lawmakers to pass legislation regulating cryptocurrencies and stablecoins. She stressed the increasing risks to financial stability posed by the rapidly growing digital asset sector.
Yellen’s testimony, postponed from Wednesday, was to deliver the annual report of the Financial Stability Oversight Council, established after the 2008 global financial crisis.
She emphasized the council’s focus on digital assets and related risks, such as those from stablecoins and crypto asset platforms. Yellen also called for legislation to regulate stablecoins and the spot market for crypto assets that are not securities.
Addressing concerns about terrorist financing through digital assets, committee chair Sen. Sherrod Brown asked Yellen about updating counterterrorism tools. Yellen noted that while they have authorities to act, there are still gaps that need to be addressed.
Sen. Mark Warner raised the issue of the risks associated with the rapid adoption of AI in finance. Yellen acknowledged this as a vulnerability that could create systemic risk and recommended deepening expertise and monitoring capacity in this area.
The impact of climate change on property insurance coverage and the possibility of U.S. investor funds being used for technology development efforts by the Chinese military were also topics of discussion during the hearing.
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