Treasury Secretary Janet L. Yellen addressed major concerns about artificial intelligence and digital assets before the US House of Representatives Financial Services Committee on Tuesday.
He relents He pointed out in the statement that the financial sector's increasing reliance on artificial intelligence deserves attention. While AI promises to reduce costs and enhance efficiency in financial services, Yellen emphasized the need for financial agencies and regulators to strengthen their oversight.
Concerns about artificial intelligence and cryptocurrencies
The minister also stressed the Financial Stability Oversight Council's concerns about potential market instability when it comes to digital assets. It cited specific risks, including the risk of withdrawals on crypto-asset platforms, vulnerabilities resulting from crypto-asset price fluctuations, and the growth of platforms operating without adhering to legal and regulatory standards.
Yellen called for existing regulations to be enforced and urged Congress to pass new legislation aimed at regulating stablecoins and the spot market for crypto assets not classified as securities. While it has urged cooperative efforts with Congress, the United States continually finds itself in a state of uncertainty about rulemaking for these sectors.
Other countries are taking the lead
In contrast, the European Securities and Markets Authority (ESMA) has made strides in this area by recently issuing two consultation papers. These documents request public comments on the development of standards and guidelines under the Markets for Cryptoassets (MiCA) Regulation. In a move that signals a tougher regulatory approach, the European Union has proposed tougher rules for foreign cryptocurrency companies.
On the other hand, Hong Kong has taken a decisive stance on this issue. The region has mandated that unlicensed cryptocurrency companies cease operations by May 2024, demonstrating the need for specific guidelines despite it being a “crypto hub.”
However, digital asset regulations in the United States are still fraught with uncertainty. While other global entities are moving forward with clearer guidance and frameworks, the United States continues to cycle in an overload of risk commentary without making tangible progress in addressing the risks.
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