While federal agencies have some regulatory authority to oversee digital assets, Congress should develop a framework to close gaps in oversight, Treasury Secretary Janet Yellen told the House Financial Services Committee.

Details: In a hearing to provide the Financial Stability Oversight Council’s report to Congress, Yellen said stablecoins pose risks to the financial system and cited the Commodity Futures Trading Commission’s lack of oversight authority as a regulatory gap. Recognizing that states such as New York have enacted stablecoin regulations, she said there should be a federal regulatory floor that would apply to all states.

ICBA View: While Congress continues to debate crypto oversight, the International Organization of Securities Commissions last fall finalized recommended policies to govern digital assets markets. In comments to IOSCO, ICBA said the policy recommendations are prudent steps to safeguard the financial system against the risks posed by crypto assets and reinforced its view that cryptoassets are likely securities and should be subject to oversight from market regulators.

More: Recent Main Street Matters posts from ICBA Senior Vice President of Digital Assets and Innovation Policy Brian Laverdure cover the latest crypto collapses, the evolving regulatory environment for digital assets, and the policy debate over treating cryptoassets as securities or commodities.