There is need for more effective oversight of cryptocurrency markets to promote financial stability, according to the U.S. Treasury secretary, who issued a statement Wednesday in the wake of the recent failure of a major exchange of the digital assets.
Treasury Secretary Janet Yellen indicated in the statement that the failure of the FTX exchange resulted in an “unfortunate impact” for holders and investors of crypto assets. She stated that the U.S. has very strong investor and consumer protection laws for most of our financial products and markets designed to address the risks.
However, she added, the federal government, including Congress, “needs to move quickly to fill the regulatory gaps” on crypto assets outlined in an executive order issued by President Joe Biden (D) last year.
“In terms of financial stability, spillovers from the events in crypto markets have been limited, but a recent report by the Financial Stability Oversight Council, which Treasury chairs, warned that further interconnections of the traditional financial system and crypto markets could raise broader financial stability concerns,” Yellen stated. “Going forward, it’s vital we do what is necessary to address these concerning risks and act to protect consumers and promote financial stability.”