US Treasury Secretary Yellen points to UST slip, asks for new stablecoin legislation by the end of 2022

Treasury Secretary Janet Yellen is still calling for stablecoin legislation by the end of the year.

In response to questioning on stablecoins from Senator Pat Toomey (R-PA) at a May 10 hearing, Yellen confirmed that "it is important, even urgent" that Congress pass stablecoin legislation. She further called it "highly appropriate" that Congress do so by the end of the year. 

Yellen specifically highlighted the weekend's drama surrounding TerraUSD (UST), saying: 

“A stablecoin known as TerraUSD experienced a run and declined in value. I think that this simply illustrates that this is a rapidly growing product and there are rapidly growing risks.”

Toomey, for his part, is behind a piece of legislation seeking to address non-algorithmic stablecoins. In response to Yellen, he noted an "important distinction" with algorithmic stablecoins like UST. 

The hearing focused on the work of the Financial Stability Oversight Council, a supervisory regulator that the Treasury Secretary presides over. The President's Working Group report on stablecoins from November highlighted that failing congressional action, FSOC should take action to regulate crypto. 

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Kollen Post is a senior reporter at The Block, covering all things policy and geopolitics from Washington, DC. That includes legislation and regulation, securities law and money laundering, cyber warfare, corruption, CBDCs, and blockchain’s role in the developing world. He speaks Russian and Arabic. You can send him leads at [email protected]