U.S. Treasury Secretary Janet Yellen is meeting with the CEOs of Wall Street banks Thursday to discuss the global economy and U.S. inflation, while also raising “the need for responsible innovation in digital assets,” according to the Treasury Department.
That discussion comes as the Treasury closely watches activity in the crypto market, according to a department official who was not authorized to speak on the record. The recent turmoil in crypto is underlining the growing urgency for establishing regulations for the industry, the official said.
While dramatic market swings often push Treasury secretaries to reach out to U.S. financial leaders, Yellen’s meeting with a long list of bank executives had long been scheduled, according to people familiar with the event. Both bankers and the administration have been keen on the subject of cryptocurrency oversight, so that topic is featured on the agenda even as bitcoin and other digital mainstays slide into ever-deeper declines.
In March, President Joe Biden ordered his administration to formulate plans for regulating the crypto industry, and Yellen’s Treasury has been directing much of that work. The reports have started to emerge, with the Department of Justice issuing one earlier this month that said the U.S. should share more information about crimes tied to cryptocurrency and help build up its overseas partnerships to help combat them.
Still, the administration and officials from the U.S. financial agencies routinely say that Congress needs to weigh in to properly authorize the federal government to regulate crypto. That long-awaited intervention is likely to be stymied by politics this year as lawmakers focus on the midterm elections. So, despite some hope from key politicians such as Sen. Pat Toomey (R-Pa.) that a bill policing stablecoins could emerge this year, observers expect lawmakers to begin to make more serious progress on any legislation in 2023.
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