US Treasury Secretary Janet Yellen said in a statement today that crypto regulation should support innovation as well as the efficient management of risks. Moreover, Yellen added that the outline of the US executive decision, which was received positively by crypto market participants, should be adhered to.
The US Treasury Secretary spoke about the digital assets policy published by the ministry. Yellen stated that US institutions have the competence to manage the risks arising from cryptocurrencies and provide appropriate oversight to next generation brokerage houses such as cryptocurrency exchanges.
Yellen also said that banks and other traditional financial firms are becoming more involved in crypto-asset markets, so regulatory frameworks should appropriately reflect the risks of these new activities.
Efforts to control the crypto money markets with laws are on the agenda of many countries, but there is no country that can take a concrete step in this regard yet. Legislators are exploring the most effective way to oversee services such as crypto-asset custody, particularly those provided by crypto operators and banks.
Another of the biggest problems in cryptocurrency trading is the excessive volatility seen in the markets. While some US lawmakers say that measures should be taken to reduce this volatility, on the other hand, concerns are shared that direct intervention may disrupt the structure of the market. But the White House and Treasury message to support discreet innovation calmed many of these concerns.
According to the executive order approved by Biden, the Treasury and Commerce Departments and other institutions should prepare reports on the future of money and the role cryptocurrencies will play in the future.
In one part of her speech, Janet Yellen touched on a different topic about regulations, saying that cryptocurrency regulations should be technology-neutral. In this context, Yellen thinks that the focus should be on the risks associated with the services provided to individuals and institutions, not on the underlying technology.
Explaining it this way, Yellen believes that savers' assets should be protected from fraud, regardless of whether they are stored on a balance sheet or in a distributed ledger. She also emphasized the need for strict auditing of companies that provide custody services for client assets.