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Financial Stability Oversight Council Recommends Regulatory Coordination to Address Digital Asset Risks; Janet Yellen Quoted

The Financial Stability Oversight Council has released its annual report recommending that state and federal regulators continue to assess risks posed by new uses of digital assets to the financial system and facilitate coordination to address potential issues related to such assets.

FSOC said Friday member agencies should consider the recommendations outlined by the President’s Working Group on Financial Markets, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. in a November report about stablecoins.

That PWG report called on Congress to propose a measure “to ensure that payment stablecoins and payment stablecoin arrangements are subject to a federal prudential framework on a consistent and comprehensive basis.”

The council said it will further evaluate stablecoins’ potential risks and consider available steps to address the risks cited in the PWG report in the absence of congressional action.

FSOC’s 2021 annual report “highlights the critical importance of regulatory attention and coordination regarding stablecoins and other crypto assets, as the market for these assets continues to rapidly grow and evolve,” said Treasury Secretary Janet Yellen said.

“I look forward to engaging with the Council in 2022 on these issues and others discussed in the report,” Yellen added.

POC - Digital Currency and National Security Forum

On Jan. 27, the Potomac Officers Club will host a virtual forum to offer the GovCon community an insight into the national security aspect of digital currencies.

POC’s Digital Currency and National Security forum will feature National Cyber Director Chris Inglis and Juan Zarate, global co-managing partner and chief strategy officer at K2 Integrity, as keynote speakers.

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