U.S. Treasury Secretary Janet Yellen has stressed the importance of managing U.S. borrowing needs amid higher long-term interest rates, emphasizing the need to boost revenue in budget negotiations. “We’ve raised the interest-rate forecast. That does make a difference. It makes it somewhat more challenging to keep deficits and interest expense under control,” Yellen told Bloomberg […]
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US Lawmakers Press Treasury Secretary Janet Yellen on Crypto Oversight Gaps
Four U.S. lawmakers have pressed Treasury Secretary Janet Yellen regarding crypto oversight gaps. The Financial Stability Oversight Council (FSOC), which Yellen chairs, has issued “repeated warnings about the lack of oversight of the digital asset markets,” the lawmakers detailed, questioning Yellen how the council believes existing laws should apply bitcoin, ether, and non-security crypto assets.
Lawmakers Want Answers From Yellen
Representatives Patrick McHenry, Glenn Thompson, French Hill, and Dusty Johnson sent a letter to Treasury Secretary Janet Yellen concerning crypto regulation on Tuesday following her testimony before the House Committee on Financial Services. In her testimony, Yellen called on Congress to “pass legislation to provide for the regulation of stablecoins and of the spot market for crypto-assets that are not securities.”
McHenry chairs the House Committee on Financial Services; Thompson chairs the House Committee on Agriculture; Hill chairs the Subcommittee on Digital Assets, Financial Technology, and Inclusion; and Johnson chairs the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
The letter explains that following the collapse of crypto exchange FTX, the House Committees on Agriculture and Financial Services “embarked on a historic effort to craft legislation providing increased regulatory oversight over the digital asset markets.” Specifically, the Financial Innovation and Technology Act for the 21st Century (FIT21) “would provide federal regulators with clear authority over the digital asset spot markets and ensure the customer protections seen in the current financial regulatory structure apply to intermediaries and digital asset-related activities.”
The lawmakers pointed out that the Financial Stability Oversight Council (FSOC), which Yellen chairs, has issued “repeated warnings about the lack of oversight of the digital asset markets” and has identified the same gaps they sought to address in their legislation. The gaps include “limited direct oversight of the spot market for digital assets that are not securities, opportunities for regulatory arbitrage, and whether vertically integrated market structures can and should be accommodated under existing laws and regulations.”
Commenting on the authority of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in regulating crypto, the Congress members shared with Yellen:
To highlight the gaps, bitcoin and ether have not been recognized as securities … Because these underlying assets are not securities, neither the CFTC nor SEC has the authority to register and regulate trading platforms or other intermediaries engaged in spot transactions in both of these digital assets.
The lawmakers proceeded to ask the Treasury Secretary some questions “To further understand how FSOC is facilitating coordination and communication between the SEC and CFTC as it relates to federal oversight of the spot market for digital assets that are not securities,” the letter reads. They asked Yellen to respond no later than Feb. 20.
Firstly, the Congress members requested details of the Digital Assets Working Group’s meetings, from its 2017 inception to 2023. Secondly, the lawmakers seek clarification from Yellen regarding the FSOC’s position that securities laws apply to all crypto-asset issuers and secondary transactions involving these assets.
Moreover, referencing SEC Chair Gary Gensler’s claiming that most crypto tokens qualify as securities, they highlighted that “the final investment contract analysis is backwards looking, made by a court after the transaction in question has been completed.” They asked Yellen: “How does this reactive legal authority provide adequate protection for customers, in the absence of comprehensive legislation?”
The lawmakers also asked the Treasury Secretary: “Is it the view of FSOC that both bitcoin and ether are not securities?” In addition, they questioned: “Given the existing authorities of the CFTC over segments of the non-security digital asset market, is it the Council’s view that expanding the CFTC’s jurisdiction to encompass the spot market in non-security digital assets is appropriate?”
What do you think about the lawmakers’ letter to Janet Yellen regarding crypto oversight? Let us know in the comments section below.
US Treasury Secretary Janet Yellen Urges Congress To Pass Crypto Legislation
In a recent statement before the House of Representatives, US Treasury Department Secretary Janet Yellen emphasized the need for Congress to pass legislation that provides clarity and regulation in the crypto markets.
Secretary Yellen Calls For Action ‘Digital Asset Risks’
During the Financial Committee hearing, Yellen highlighted the “risks” associated with digital assets and called for measures to address potential vulnerabilities and non-compliance with applicable laws and regulations.
Yellen specifically mentioned concerns related to runs on crypto-asset platforms, stablecoins, and the “proliferation” of platforms acting outside regulatory boundaries.
The Treasury Secretary stressed the importance of enforcing existing rules and regulations while urging Congress to enact legislation specifically targeting stablecoins and “non-securities” crypto assets in the spot market.
Notably, Taylor Barr, head of policy at the blockchain trade association Chamber of Digital Commerce, pointed out that the bipartisan FIT for the 21st Century Act, led by Representative French Hill, aligns with Yellen’s call for market structure and regulation.
Hill, a proponent of the legislative environment for crypto, previously highlighted the progress made in the House of Representatives. He emphasized passing the first comprehensive regulatory framework for digital assets and the prudent approach to stablecoins.
Furthermore, Hill believes that these initiatives address significant “regulatory gaps” and contribute to the crypto industry’s growth.
Pro-Crypto Stance And Legislative Initiatives Align
Barr also commended the Clarity for Payment Stablecoins Act proposed by the Chairman of the US Financial Committee, Patrick McHenry.
This act aims to establish consistent oversight and consumer protection for payment stablecoins, incorporating successful state-level regulations and striking a balance between innovation and regulatory certainty.
McHenry, who has been vocal about the importance of the US leading the financial system of the future, has already emphasized the bipartisan progress on legislation to address the regulatory challenges posed by digital assets.
McHenry called for the “completion of the job,” highlighting the Clarity for Payment Stablecoin Act as a crucial step towards establishing a federal framework for stablecoins.
Overall, the convergence of Secretary Yellen’s call for regulation, Representative Hill’s legislative initiatives, and Chairman McHenry’s pro-crypto stance reflect a growing momentum toward establishing a comprehensive regulatory framework for the crypto industry.
However, it remains to be seen how Secretary Yellen’s proposed regulatory enforcement ideas and proposals will strike a balance between fostering innovation, as emphasized by McHenry and Hill while ensuring the growth of nascent technology.
As discussions on crypto legislation continue, the industry eagerly anticipates the outcome, seeking a regulatory environment that provides clarity and consumer protection and positions the United States at the forefront of digital asset innovation.
Featured image from Shutterstock, chart from TradingView.com
US Treasury Secretary Janet Yellen Declares ‘Soft Landing’ Reached, Americans Recovering Optimism
Janet Yellen, U.S. Treasury Secretary and former Chairman of the U.S. Federal Reserve, believes that the recent improvements in the American economy show that the country has achieved a soft landing. For Yellen, the recent low figures of inflation and the strength of the labor market are signs of this scenario.
Janet Yellen Declares U.S. Economy Reached ‘Soft Landing’ Scenario
U.S. Treasury Secretary Janet Yellen believes that the U.S. economy has improved during the last six months, declaring that she feels that what they are seeing now can be described as a soft landing, which happens when the measures taken by the Federal Reserve, as interest rate hikes, slow down inflation without causing a recession.
According to Yellen, this is what the Federal Reserve has achieved, taking the latest labor markets and inflation numbers into account. Supporting her statements, Yellen explained that the labor market hadn’t slowed down, with 23 months in a row with the unemployment percentage under 4%, something not seen in 50 years, and 216,000 jobs added in December.
In an X post, Yellen stated:
The American people, workers, and businesses have helped put us on a path to a soft landing. The President’s economic agenda is giving them the tools they need to grow the economy, including historic investments in infrastructure, clean technology, and semiconductors.
Yellen also remarked on the advances that the economic apparatus of the U.S. had reached, achieving a steep inflationary decline during the last six months. However, he acknowledged that there is more to do on the inflationary front concerning housing and food prices, that have remained high. Also, she stated that polls have started to show that Americans are becoming more optimistic about their future.
Yellen’s recent remarks are consistent with her statements from December when she stressed that, even when there was always a recession risk, she didn’t believe it was particularly high at that moment, explaining that people would start feeling better about the economy gradually over time.
What do you think about Janet Yellen’s statements on reaching a soft landing scenario? Tell us in the comments section below.
Treasury Secretary Janet Yellen Discusses US Economy, Recession Risk, Soft Landing
U.S. Treasury Secretary Janet Yellen believes that inflation has come down meaningfully but there’s still further to go for the Federal Reserve to achieve its 2% inflation target. She noted that the central bank has two risks to manage. “One is that inflation doesn’t come down back to their target as they envisioned, and the other is that the economy becomes too weak,” she detailed.
Yellen Discusses U.S. Economy
U.S. Treasury Secretary Janet Yellen discussed the state of the U.S. economy in an interview with CNBC on Wednesday as the Federal Reserve left interest rates unchanged for the third consecutive time.
While stating that “Inflation has come down meaningfully,” Yellen cautioned: “There’s further to go for the Fed to achieve its 2 percent objective, but I think we’re on a path, and you can see a consistent pattern in inflation coming down over time.” The U.S. November Consumer Price Index rose 3.1% on an annual basis.
Regarding whether the U.S. economy will slide into a recession, Yellen said:
Well, I believe in any year, even if you knew nothing about the economy, there’s a recession risk that’s over 10%. So, there is always some recession risk. I don’t think it’s particularly high. Consumer spending, we have seen remain solid.
“Gradually over time, I think people will feel better about the economy,” Yellen emphasized while admitting that people have noticed that “the level of prices in some cases is higher than it was before the pandemic.” She mentioned: “They notice their bills, certain bills are higher. Rent would be a very good example. Apartment rentals, for example.”
Yellen also reiterated her view that the U.S. economy is heading for a soft landing, adding that she saw a reasonable chance that growth would continue in 2024. “I think there’s a reasonable chance we get it. I think that we’re on that path. My baseline is that we’ll achieve a soft landing,” the Treasury Secretary described.
Commenting on whether the Federal Reserve will cut interest rates next year, Yellen opined: “As inflation moves down, it’s in a way natural that interest rates should come down somewhat because real interest rates would otherwise increase, which can tend to tighten financial conditions.” She continued:
They have two risks to manage. One is that inflation doesn’t come down back to their target as they envisioned, and the other is that the economy becomes too weak … I’m going to leave that call to them.
What do you think about the statements by Treasury Secretary Janet Yellen? Let us know in the comments section below.
US Treasury Deputy Secretary: Crypto Not Major Source of Funding for Terrorists
U.S. Treasury Deputy Secretary Wally Adeyemo says crypto is not the vast majority of the ways terrorist groups are funded, noting that these organizations “continued to use the traditional banking system.” His statements followed media reports claiming that Hamas raised a large sum of money in cryptocurrency.
Crypto Not Major Funding Source for Terrorist Groups
Wally Adeyemo, United States Deputy Secretary of the Treasury, addressed the role of cryptocurrency in financing terrorist organizations during an interview on Friday with the Royal United Services Institute (RUSI)’s Centre for Financial Crime and Security Studies.
Several news outlets, including the Wall Street Journal, recently reported that Hamas raised millions of dollars in crypto. However, blockchain data analytics firm Elliptic clarified that these media reports misrepresented its data, and there is actually no evidence that Hamas has received large volumes of crypto funds.
Adeyemo said during Friday’s interview:
Today I would say that … the use of crypto is not the vast majority of the ways that these groups are funded.
“I think the way to think about this is that they [crypto] are evolving like everyone else is evolving. When you think about when modern sanctions started to be used in 2001, many of these terrorist groups were using, at that point, the traditional banking system,” he explained, emphasizing:
They continued to use the traditional banking system. That’s why we continue to work with financial institutions.
“But as the modern internet came into play, many of these groups started to fundraise using things like Venmo, Paypal, and these products,” Adeyemo noted. “And we worked closely with those companies to prevent them from being abused by these actors as well.”
The deputy secretary of the Treasury emphasized: “Now that evolution continues and the next source of that is cryptocurrency … We need this industry to work with us to make sure that we are preventing cryptocurrency from being used and abused by Hamas and these groups going forward.” Adeyemo explained:
The thing that we know about terrorist groups, and those who work to move money illicitly, is they’re going to use any new technology to try to do that.
He stressed that the government is taking action now to prevent crypto from becoming the way terrorist groups are funded, noting that the Treasury Department has been going after crypto mixers.
What do you think about U.S. Treasury Deputy Secretary Wally Adeyemo stating that crypto is not the vast majority of the ways that terrorist groups are funded? Let us know in the comments section below.
Worldcoin Kenya Controversy: Cabinet Secretary Blasted for Inconsistent Statements About Project’s License Status
A Kenyan parliamentary committee tasked with investigating Worldcoin’s activities in the African country has reportedly censured a government official over his inconsistent statements about Worldcoin’s license status. The committee also said it found that Worldcoin’s “Orbs” were not approved by the Communications Authority of Kenya as required by law.
Worldcoin Allegedly Operated Without a License
The Kenyan parliamentary committee investigating Worldcoin’s activities in the country recently censured the Kenyan ICT cabinet secretary Eliud Owalo over his previous pronouncements about the crypto project’s license status. The committee, chaired by Gabriel Tongoyo, said inconsistencies in Owalo’s statement issued on Sept. 11 suggest that Worldcoin may have operated for just over a year without the requisite license.
As previously reported by Bitcoin.com News, Owalo is widely believed to have initially backed the crypto project. However, the cabinet secretary later appeared to make an about-face when he accused Worldcoin of not adhering to the requirements of its registration license. In response, the Kenyan parliament launched a committee charged with establishing the facts about Worldcoin’s license status, among other things.
According to a report in The Nation, the parliament committee has now determined that Owalo’s testimony undermines Worldcoin’s license claims.
“In the said submission, the CS [Cabinet Secretary Owalo] noted that Worldcoin started collecting data in public places on May 31, 2021, and applied for registration as data controllers in Kenya on August 22, 2022, one year after commencing their activities in Kenya, contrary to the Data Protection Act of 2019,” the committee wrote in its report.
However, the committee noted that Owalo has denied proclaiming that Worldcoin’s activities in the country were above board.
‘Orbs’ Not Approved
Meanwhile, in addition to the licensing issues, the Kenyan parliamentary committee said it also found that Worldcoin’s eyeball scanning devices, or “Orbs,” were not approved by the Communications Authority of Kenya. The committee further alleged that Worldcoin’s transfer and storage of user data to Amazon Web Services servers in South Africa violated section 48 of the Data Protection Act.
Concerning the license status of Tools for Humanity Corp and Tools for Humanity Gmbh Germany, two companies behind the Worldcoin project, the committee said:
“The two companies do not appear in the Business Registration Service database of registered businesses or companies in Kenya and hence lack the legal mandate to transact any business in Kenya according to provisions of the Companies Act, 2015.”
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India to Finalize Crypto Stance in Coming Months, Economic Affairs Secretary Says
India’s economic affairs secretary says the Indian government will decide on the country’s crypto position “in the coming months.” He explained that the government will consider all the recommendations presented at the G20 summit regarding crypto regulation “very carefully and decide our own policies and thereafter take further action.”
Officials Discuss Indian Crypto Regulation
India’s Economic Affairs Secretary Ajay Seth talked about how the Indian government will proceed with establishing a crypto framework for India in an interview with CNBC-TV18 on Sunday.
India recently hosted the G20 leaders’ summit where crypto regulation was among the key topics of discussion. At the conclusion of the summit, the G20 leaders endorsed high-level recommendations proposed by the Financial Stability Board (FSB) on the regulation of crypto assets and stablecoins. The G20 also welcomed various proposals by the International Monetary Fund (IMF) and other standard-setting bodies.
Seth told the news outlet Sunday that India plans to establish its own cryptocurrency regulations through comprehensive consultations at both the global level and with domestic stakeholders. The government official was quoted as saying:
Based on the consensus which we have been able to achieve or rather build, we will be considering those recommendations very carefully and decide our own policies and thereafter take further action.
The economic affairs secretary was also asked about the proposed ban on crypto by India’s central bank, the Reserve Bank of India (RBI). He replied: “You are asking a leading question … it is not to be seen in that binary.”
He clarified: “It’s a framework for assessing the risk that has been put together, what will be the sound policies. So keeping that framework in mind now we will analyze our own position with reference to what globally the leaders have agreed that they will travel it together.” Seth further shared:
So given those what should be our position will be decided in the coming months.
Seth noted that the G20 has made significant progress regarding global cryptocurrency regulation. He highlighted reports by standard-setting bodies that provide a clear and comprehensive policy framework for assessing the risks posed by crypto assets. They include reports by the International Monetary Fund (IMF), the Financial Stability Board (FSB), the Financial Action Task Force (FATF), and the Bank of International Settlements (BIS). Seth also mentioned that the G20 acknowledges the risks linked to cryptocurrencies, especially concerning emerging economies.
Referring to the declaration of the G20 leaders stating that they have asked their finance ministers and central bank governors to discuss taking forward the Roadmap at their meeting in October, the news outlet quoted unnamed official sources as saying: “Now the G20 leaders have endorsed it [global framework] and now ministers and governments will discuss it and take it forward.” The sources continued:
We expect a lot of discussion to happen on how to implement it faster, swifter, and in a comprehensive manner. We have a good framework to decide our own way forward. The foundation is ready beyond how much we want to go it is for us to decide in the coming months and then take a call.
“If you want to ban it (crypto), go ahead and ban it. But if the rest of the countries are not banning it, it will be extremely difficult for one country to ban it. Now that discussion, we have to take up and try to build a consensus on regulation. Then we gradually decide on our own system. The discussion will happen now in our system. It is not an easy one,” official sources added.
In the IMF-FSB synthesis paper developed at the request of India’s G20 Presidency, the two organizations stated: “Blanket bans that make all crypto-asset activities … illegal can be costly and technically demanding to enforce. They also tend to increase the incentives for circumvention due to the inherent borderless nature of crypto-assets, resulting in potentially heightened financial integrity risks, and can also create inefficiencies.”
Do you think India will come up with positive crypto regulation? Let us know in the comments section below.
UN Secretary General Antonio Guterres Calls for Reform of ‘Outdated, Dysfunctional, and Unfair’ Global Financial Architecture
Antonio Guterres, Secretary General of the United Nations (U.N.), has noted changes that need to happen with today’s financial institutions to fit into the current multilateral world. During the recent BRICS leaders summit, Guterres said that the current “outdated, dysfunctional, and unfair” financial system needs to be reformed, including Bretton Woods institutions.
UN Secretary General Antonio Guterres: We Must Urgently Reinvigorate Multilateralism
Antonio Guterres, Secretary General of the United Nations (U.N.), has called to embrace cooperation and multilateralism, explaining that there was “no choice” as the world becomes more multipolar. At the recent BRICS leaders summit in Johannesburg, Guterres stated that multipolarity was not guaranteed to achieve peace and that more should be done to grow a “global community.”
Guterres blasted the global establishment, stating:
As the global community moves towards multipolarity, we desperately need a strengthened and reformed multilateral architecture based on the U.N. Charter and international law.
Furthermore, Guterres acknowledged current institutions were outdated and answered to a deprecated world configuration, calling for reforms that would “reflect today’s power and economic realities, and not the power and economic realities of the post-Second World War.”
“This is particularly true of the Security Council of the United Nations and the Bretton Woods institutions,” Guterres specified, including the International Monetary Fund and the World Bank in his call for reform.
The U.N. Security Council has been widely criticized as small and ineffective by several scholars consulted by the Carnegie Endowment for International Peace.
Financial System Reform
Guterres reinforced the need to reform the current financial system as part of what he called “priorities for action and justice.” Nonetheless, he recognized that this is unlikely to happen quickly in today’s geopolitical situation.
Guterres stated:
Redesigning today’s outdated, dysfunctional, and unfair global financial architecture is necessary, but I know it won’t happen overnight. Yet we can – and must – take practical action now.
The BRICS bloc, integrated by Brazil, Russia, India, China, and South Africa, has been moving to create a new alternative financial architecture away from Western traditional power centers and the influence of the U.S. dollar. The BRICS “Johannesburg II Declaration” stressed the need to transact in national currencies and called for the consideration of “the issue of local currencies, payment instruments and platforms” for the next summit that will be held in Kazan.
What do you think about Guterres’ criticism of current financial institutions? Tell us in the comments section below.
Treasury Secretary Yellen: BRICS Currency Won’t Threaten US Dollar Dominance
U.S. Treasury Secretary Janet Yellen has stated that she does not see the U.S. dollar’s dominance being threatened by any development, including the proposed BRICS currency. Yellen stressed that all the data of which she is aware shows that the dollar is overwhelmingly used in international transactions, emphasizing: “I don’t think that there is an alternative that could possibly displace that for the foreseeable future.”
Janet Yellen on BRICS Currency, Challenges to US Dollar Dominance
U.S. Treasury Secretary Janet Yellen addressed concerns regarding the dominance of the U.S. dollar and the potential challenges by a proposed BRICS currency during a press conference at the U.S. embassy in Beijing on Sunday. The press conference took place at the conclusion of her four-day visit to China.
While there has been no official announcement by the BRICS, speculation about a new BRICS currency has been rife after Russian news outlet RT reported that Russia has confirmed that the BRICS bloc will launch a new currency backed by gold.
Yellen was asked to comment on the plan by the BRICS countries (Brazil, Russia, India, China, and South Africa) to create a new currency that many say would erode the dominance of the U.S. dollar. “I just want to reiterate what I’ve said in the past, which is I think the United States can rest assured that the dollar is going to play the dominant role in facilitating international transactions and serving as a reserve currency in the years ahead,” the treasury secretary replied, elaborating:
I don’t see that role being threatened by any development including the one that you’ve mentioned [BRICS common currency].
“I’ve said previously and would reiterate that because of the role of the dollar and its ability to enable us to implement sanctions, there certainly is motivation in countries around the world to find an alternative,” Yellen continued. However, the treasury secretary emphasized:
All the data of which I’m aware shows that the dollar is overwhelmingly, close to 90%, used in international transactions, and I don’t think that there is an alternative that could possibly displace that for the foreseeable future.
While RT reported that Russia has confirmed that the BRICS will launch a common currency backed by gold, Leslie Maasdorp, vice president and chief financial officer of the New Development Bank, also known as the BRICS Bank, stated last week that “The development of anything alternative [to the U.S. dollar] is indeed a medium to long-term ambition.”
In June, Yellen defended the U.S. dollar, stating: “There is a very good reason why the dollar is used widely in trade and that’s because we have deep, liquid, open capital markets, rule of law and long and deep financial instruments.” However, she acknowledged in April that over time, the use of financial sanctions “could undermine the hegemony of the dollar.”
What do you think about the statements by Treasury Secretary Janet Yellen about the U.S. dollar and the challenges by the proposed BRICS currency? Let us know in the comments section below.