Treasury Secretary Janet Yellen said Thursday that the turmoil in the cryptocurrency market poses no threat to the stability of the US financial system.
Yellen noted that TerraUSD USTUSD,
had broken away from its $1 peg over the past few days, and the world’s largest stablecoin, Tether, briefly faced similar pressures. Other companies in the industry have seen their shares fall sharply.
“I wouldn’t call it a real threat to financial stability on that scale, but they’re growing very quickly,” Yellen said during a hearing before the House Financial Services Committee.
Though crypto holdings are relatively new, the Treasury Secretary said the turmoil was just an old-fashioned bankrun.
“They pose the same risks that we have known for centuries.
“There are assets that guarantee a 1:1 conversion into the dollar at will,” she said.
Read: Crypto has weathered worse
Yellen said FSOC is working on a report on the financial risk of digital assets. She called on Congress to adopt a “comprehensive framework” so that there were no regulatory gaps.
“We really need a regulatory framework to protect us from the risks,” Yellen said.
Overall, the US financial system responded well to the shock of the Russian invasion of Ukraine, Yellen said.
https://www.marketwatch.com/story/yellen-says-cryptocurrency-market-turbulence-does-not-real-threat-to-u-s-financial-stability-11652371154?rss=1&siteid=rss Yellen: The turmoil in the cryptocurrency market is not a “real threat” to US financial stability.