The US Treasury releases a digital assets report asking Congress for more resources to police crypto, regulate stablecoins, legislate crypto tokens, and more
The Treasury's request follows a longer policy arc in which officials first considered whether stablecoins threatened financial stability, then made bank-like treatment for stablecoin issuers an early legislative priority. A September warning that crypto's financial risks outweighed its benefits set up the report's broader call for congressional action.
The FSOC's involvement makes the issue more than a question of market conduct: the council is framing growth in digital assets as a potential risk to the wider financial system.
First-order effects
Congress is asked to supply the Treasury with additional enforcement capacity and to establish rules for stablecoins and crypto tokens.
The Treasury and FSOC gain a clearer policy basis to press lawmakers for a statutory framework rather than relying solely on existing oversight.
Second-order effects
Stablecoin issuers face the prospect of regulation modeled on banks, extending the administration's earlier push for federal oversight of issuers into a broader digital-assets agenda.
Regulatory responsibility becomes a central congressional decision, shaping how agencies can police crypto markets and which token activities receive explicit rules.
Third-order effects
If Congress acts on the Treasury's requests, US crypto policy would move from agency warnings and targeted stablecoin proposals toward a legislated framework tied to financial-stability oversight.
The pattern places stablecoins at the entry point for wider crypto regulation, with the FSOC's systemic-risk framing likely to keep pressure on token-market legislation.
The trend: US digital-asset policy is shifting from identifying stablecoin and market risks to seeking congressional authority and resources for enforceable oversight.
All legislative power is vested in Congress, meaning only Congress can make new laws or change existing laws. Executive Branch agencies issue regulations with the full force of law, but these are only under the authority of laws enacted by Congress. Congress hasnt ruled crypto.
I agree with the FSOC recommendation that Congress needs to act first. In fact, I would say that digital assets are novel products that REQUIRE Congressional action BEFORE the SEC and CFTC has authority to write or enforce rules on them.Squarepeg/roundhole https://www.ft.com/...
“Similar to the other executive order reports and summaries, FSOC's report overstates the risks—and understates the opportunities—crypto networks present.” https://www.wsj.com/...
7/ Thoughtful crypto policy will create jobs, empower individuals and protect consumers, and ensure that web3 develops here. We appreciate the commitment of the agencies that worked on the FSOC report, and we look forward to contributing to the debate on what comes next
Treasury says there's some misrepresentation over whether and how these companies are regulated (i.e. they have a state charter or do KYC but aren't regulated as a whole). https://twitter.com/...
2/ In particular, the report recommends giving the CFTC spot market oversight authority. We agree. This is in line with the bill from @SenStabenow and @JohnBoozman, and proposals from other members, both Ds and Rs, and is the obvious critical next step.
1/ Today FSOC released its “Digital Asset Financial Stability Risks and Regulation” report. Tl;dr: We've been calling for many of the report's recommendations for years and we look forward to working on next steps with those who want the US to lead on digital innovation.
Here's the full 124-page Treasury report on crypto market instability. Haven't had a chance to go through it fully, but it discusses Terra, use of leverage, 3AC, regulatory gaps, other pertinent issues. [PDF link] https://home.treasury.gov/... https://twitter.com/...
Treasury Department's Financial Stability Oversight Council issues a report warning about crypto causing instability in the financial system. From a fact sheet [PDF]: https://t.co/VCgvBrxfCk https://t.co/yGBi9UJqC5
#CertiKSkynetAlert 🚨 The #FSOC released their report on “Ensuring Responsible Development of Digital Assets” as per executive order. Their report outlines risks and gaps posed by digital assets and provides suggestions to alleviate potential pitfalls. https://home.treasury.gov/..…
FSOC was established to identify and reduce possible risk in our financial system. This report details many risks, providing the industry a guidebook for all of the policy and technical questions that it must answer. https://home.treasury.gov/... 1/
As I read the FSOC report on digital assets released today, crypto has a ‘Whales’ problem. @AaveAave is highlighted when in 2021 a single user withdrew over $4.2 billion in crypto-assets leading to an 18 percent decline in assets locked (page 37). https://home.treasury.gov/... ht…
Excellent summary by @el72champs of the FSOC report. Key points: - Powerful inter-agency group says existing regs are fine for much of crypto sector - Calls for new laws for stablecoins - Warns of centralization in an industry devoted to decentralization https://www.nytimes.com/.…