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
Janet Yellen Calls for Crypto Regulation in Congressional Testimony, Citing Financial System Risks
Treasury Secretary Janet Yellen, in her forthcoming appearance before the House Financial Services Committee, is set to emphasize the potential dangers the cryptocurrency industry presents to financial stability, advocating for legislative action to regulate digital assets effectively.
Treasury Secretary Janet Yellen Urges Congress to Act on Crypto Regulation Amid Financial System Concerns
U.S. Treasury Secretary Janet Yellen is set to speak on the potential risks posed by the crypto industry to the financial system, including the instability of stablecoins, the danger of runs on crypto platforms, and the volatility of crypto-asset prices in her testimony before the House Financial Services Committee on Tuesday. Yellen’s prepared remarks, which were shared ahead of the session, spotlight the government’s increasing focus on digital assets as a significant area of concern.
Leading the Financial Stability Oversight Council (FSOC), a coalition of federal financial regulators tasked with ensuring the stability of the country’s financial system, Yellen will present the council’s latest annual report and express the need for legislative action to regulate the crypto sector.
Yellen remarks in her prepared statement:
The council is focused on digital assets and related risks such as from runs on crypto-asset platforms and stablecoins, potential vulnerabilities from crypto-asset price volatility, and the proliferation of platforms acting outside of or out of compliance with applicable laws and regulations.
This appearance comes at a time when the crypto industry continues to recover from high-profile setbacks, including the collapse of the FTX exchange, which Yellen had previously likened to the “Lehman moment” for crypto, referencing the 2008 financial crisis-triggering fall of Lehman Brothers.
Yellen’s statement emphasizes the need for Congress to pass legislation to address these concerns, particularly the regulation of stablecoins and the spot market for crypto-assets that are not classified as securities. She states, “Applicable rules and regulations should be enforced, and Congress should pass legislation to provide for the regulation of stablecoins and of the spot market for crypto-assets that are not securities.”
The FSOC’s 2023 annual report, released in December, had already pointed out the price volatility and interconnectedness within the crypto industry as key concerns. With Yellen’s testimony, the council’s stance on the urgent need for regulatory measures becomes clearer, signaling a concerted effort to mitigate the systemic risks associated with digital assets.
Lawmakers are working on several pieces of legislation, focusing not only on stablecoins but also on broader market structure issues and anti-money laundering measures.
Do you think Yellen is in favor of crypto regulation that will give regulatory clarity, but not stifle growth and innovation? Share your thoughts and opinions about this subject in the comments section below.
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.
APEC Meeting: Yellen Acknowledges Digital Assets’ Potential, Announces Regulation Advancements
U.S. Treasury Secretary Janet Yellen has acknowledged the advantages that the adoption of digital assets might bring to several key economic activities. After the Asia Pacific Economic Cooperation (APEC) finance ministers’ meeting, Yellen stated that while digital assets do pose risks, they have the potential to increase financial inclusion.
U.S. Treasury Secretary Janet Yellen Acknowledges Potential of Digital Assets
U.S. Treasury Secretary Janet Yellen acknowledged the possibilities that adopting digital assets might bring to several areas in the economies of the Asia Pacific Economic Cooperation (APEC). In a speech given after the APEC Finance Ministers’ Meeting held in San Francisco, Yellen delved into the achievements of the officials of the 21 different economies integrating the organization.
Yellen stated:
We see increasing adoption of digital asset technologies across the region and note their potential to increase financial inclusion and reduce the cost of cross-border transactions.
However, Yellen stressed this potential cannot be fulfilled without compliance. Yellen, who chaired the meeting, also warned about the problems that uncontrolled adoption of these assets might originate, stating that “digital asset technologies carry risks” and calling for establishing “proper regulation and other policies to manage those risks.”
The Need for Regulation
Yellen reported that topics like digital assets regulation, sustainability, and inclusion were discussed during the APEC meeting. She declared the group cemented its progress on key priorities, with advancing the group’s approach to digital assets’ regulation being one of them.
The U.S. Treasury secretary also said that APEC had achieved a commitment to continue working on the “responsible development” of digital assets, sustaining that many APEC economies were already leaders in this industry.
Yellen has supported establishing regulations for digital assets, calling to plug the holes that the current legal framework presents for these. In November 2022, after the demise of FTX, Yellen stressed that the effects of this event demonstrated “the need for more effective oversight of cryptocurrency markets.” At the time, she added that Congress should “move quickly to fill the regulatory gaps the Biden Administration has identified.”
More recently, during an interview given in June, Yellen reiterated her call to Congress to step up and pass “appropriate regulation” where needed, proposing to do joint work to achieve this goal. She also signaled her support for government agencies taking action on crypto cases “using the tools they have.”
What do you think about U.S. Treasury Secretary Janet Yellen’s remarks on digital assets? Tell us in the comments section below.
58 US Lawmakers Probe Biden and Yellen on Hamas’ Crypto Operations
Fifty-eight U.S. lawmakers have probed President Joe Biden and Treasury Secretary Janet Yellen regarding Hamas’ digital asset operations, as well as whether the U.S. has had success in seizing illicit cryptocurrencies. Despite reports that terrorist groups have raised millions in crypto, the lawmakers stressed: “It remains unclear how much, if any, of the publicly identified digital assets are accessible to or remains in the possession of Hamas.”
Lawmakers Want Answers From Biden, Yellen
Fifty-eight U.S. lawmakers sent a bipartisan letter to President Joe Biden and Treasury Secretary Janet Yellen on Wednesday seeking answers regarding Hamas’ crypto operations, including the group’s “ability to utilize digital assets to finance its operations.” The fact-finding letter aims to help Congress gain a better understanding of Hamas’ use of cryptocurrencies.
Noting that Congress needs “greater context around Hamas’s operations,” the lawmakers, including U.S. Representatives Tom Emmer (R-MN), Patrick McHenry (R-NC), French Hill (R-AR), and Ritchie Torres (D-NY), wrote:
Congress must understand the size, scope, and duration of Hamas’s digital asset operations, as well as whether the United States has had success in seizing illicit digital assets.
The letter referenced various reports indicating that Hamas raised millions of dollars in cryptocurrency. “Yet, it remains unclear how much, if any, of the publicly identified digital assets are accessible to or remains in the possession of Hamas,” the letter states.
Blockchain analytics firm Elliptic recently clarified: “There is no evidence to support the assertion that Hamas has received significant volumes of crypto donations.” In fact, the firm stressed that its data on the matter has been misrepresented. Moreover, Wally Adeyemo, U.S. Deputy Secretary of the Treasury, said last month that the use of crypto is “not the vast majority of the ways that these groups are funded.”
The lawmakers requested written responses to seven questions from the White House and the Treasury no later than Nov. 29. The questions focus on the identification, valuation, and seizure of digital and non-digital assets linked to terrorist organizations. Additionally, the inquiry seeks information about the seizure of illicit digital assets, including the estimated timeline for forfeiture, the intended recipients of liquidated assets, and the legal authority for potential distribution to Israel to offset additional spending packages.
Several congressmen have urged the White House and the Treasury to use blockchain technology to assess Hamas’ crypto footprint. “Open, transparent blockchain technology should easily provide an open book of Hamas’s terror financing with digital assets, as compared to traditional, more opaque, methods of financing,” Majority Whip Emmer detailed, adding:
We request the White House and the Treasury to utilize the open blockchain ledger to assess the footprint of Hamas’s digital asset fundraising campaign.
“In doing this, Congress can better understand the United States’ available tools and capabilities to target bad actors on blockchain and support legitimate digital asset use and innovation,” the congressman from Minnesota said.
Rep. McHenry, Chairman of the House Financial Services Committee’s Oversight and Investigations Subcommittee, stressed: “It’s critical for Congress to understand the true extent of the use of digital assets for illicit purposes. In light of conflicting reports regarding Hamas’ fundraising efforts through digital assets, we are commencing a bipartisan fact-finding mission.” He added: “It’s important to note that digital assets are built on transparent and open distributed ledger technology—making it far easier to detect and track illicit activity. It’s essential that we hold bad actors in the digital asset ecosystem accountable in order for legitimate players to thrive.”
What do you think about the 58 U.S. lawmakers’ letter to President Joe Biden and Treasury Secretary Janet Yellen seeking information about Hamas’ crypto operations? Let us know in the comments section below.
Supporting 2 Wars Is Feasible Despite US Debt Surge, Says Yellen
After the United States recently accumulated hundreds of billions in debt and directed over billion to Ukraine, U.S. Treasury Secretary Janet Yellen assured on Monday that the nation is financially equipped to back two wars.
U.S. Can ‘Certainly Afford’ 2 Wars Yellen Insists Amid Rising Debt and Possible Mid-November Shutdown
Last month, just three hours shy of a potential U.S. government shutdown, President Joe Biden ratified a bill ensuring a 45-day operational continuation. Yet, if bipartisan agreement on spending remains elusive, another shutdown looms by mid-November. Speaking with the U.K.’s Sky News, Treasury Secretary Janet Yellen delved into the Ukraine-Russia conflict and the Israel-Hamas dispute.
In the conversation, Yellen conveyed her hesitance to gauge the economic repercussions of the Middle East’s recent turmoil but acknowledged the uptick in energy prices. Contrasting her remarks from last May, where she warned of a possible U.S. debt default by June, Yellen, during her interview Monday, highlighted the feasibility of the U.S. funding both wars in Ukraine and Israel.
“We do need to come up with funds, both for Israel and for Ukraine. This is a priority,” Yellen told Sky News host Wilfred Frost. “It’s really up to the House to find, seat a speaker and to put us in a position where legislation can be passed,” she added.
Yellen elaborated:
America can certainly afford to stand with Israel and to support Israel’s military needs and we also can and must support Ukraine in its struggle against Russia.
The latest statements from Yellen echo her earlier stance on Ukraine. Before the G20 Summit in July, she underscored that bolstering Ukraine was imperative for the global economy’s health. When questioned about the U.S. Treasury’s capability to deter Iran from intervening, Yellen responded:
I know that there are diplomatic conversations that are taking place. But I’m not going to go into details about them.
Over the past ten years, the national debt has been on a steady climb. Yet, with the recent upticks in interest rates and inflation, the interest expenses are now swelling. As of October 16, 2023, at 1:20 p.m. Eastern Time, usdebtclock.org shows the U.S. debt standing at a staggering .56 trillion. Yellen’s conversation occurred right before her rendezvous with finance magnates in Luxembourg.
What do you think about Yellen’s confidence that the U.S. can support two wars? Share your thoughts and opinions about this subject in the comments section below.
White House, Yellen Slam Fitch’s US Rating Downgrade — Biden Officials Call It ‘Bizarre and Baseless’
Fitch Ratings has downgraded the United States’ debt rating. Biden officials call the downgrade decision “bizarre and baseless.” Both the White House and U.S. Treasury Secretary Janet Yellen strongly disagreed with the downgrade decision. Yellen claimed that the change by Fitch Ratings “is arbitrary and based on outdated data.”
Fitch Downgrades US Rating
Fitch Ratings, one of the three largest credit rating agencies in the U.S., downgraded the United States’ long-term foreign-currency issuer default rating from AAA to AA+ on Tuesday. The rating agency explained:
The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years.
It also reflects “a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions,” Fitch added.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” the rating agency detailed. Moreover, Fitch explained that in its view, “there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025.”
In addition, Fitch described:
We expect the general government (GG) deficit to rise to 6.3% of GDP in 2023, from 3.7% in 2022, reflecting cyclically weaker federal revenues, new spending initiatives and a higher interest burden.
The rating agency placed the country’s credit rating on negative watch in May, citing the debt ceiling fight in Washington. Despite the U.S. successfully avoiding default on its debt obligations in June, Fitch maintained the negative watch. However, in its announcement on Tuesday, Fitch clarified that the negative watch on the U.S. has been removed, and a “stable outlook” has been assigned.
White House, Biden Officials, and Yellen Disagree
Following the rating downgrade, officials from the Biden administration told journalists that the governance issues highlighted by Fitch occurred during former President Donald Trump’s administration. Noting that Fitch had maintained a AAA rating during that period, a senior Biden official said: “This is a bizarre and baseless decision for Fitch to make now … It simply defies common sense to take this downgrade as a result of what was really a mess caused by the last administration and reckless actions by congressional Republicans.”
The White House also released a statement following Fitch’s decision. “We strongly disagree with this decision,” White House Press Secretary Karine Jean-Pierre said. “The ratings model used by Fitch declined under President Trump and then improved under President Biden, and it defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy in the world.”
Treasury Secretary Janet Yellen also released a statement regarding the downgrade. She stated:
I strongly disagree with Fitch Ratings’ decision. The change by Fitch Ratings announced today is arbitrary and based on outdated data.
“Fitch’s quantitative ratings model declined markedly between 2018 and 2020 — and yet Fitch is announcing its change now, despite the progress that we see in many of the indicators that Fitch relies on for its decision,” Yellen explained. “Many of these measures, including those related to governance, have shown improvement over the course of this administration, with the passage of bipartisan legislation to address the debt limit, invest in infrastructure, and make other investments in America’s competitiveness.”
What do you think about Fitch downgrading the U.S. rating? Let us know in the comments section below.