United States Senator Elizabeth Warren has written a letter to Treasury Secretary Janet Yellen regarding the testimony of Deputy Treasury Secretary Wally Adeyemo before the Senate Banking Committee. Warren reiterated her stance on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) during the hearing.
In the letter, Warren expressed her support for the implementation of more comprehensive AML/CFT measures specifically for stablecoins. Adeyemo attended the Senate hearing to discuss Treasury proposals for expanding sanctions powers to blockchain validator node operators and other related measures. The Treasury outlined its enforcement goals in response to regulatory gaps in a document referred to as a “letter to Congress” dated November 2023, which Warren mentioned in her letter.
It appears that Warren was not referring to the stablecoin bill introduced in the Senate by Senators Kirsten Gillibrand and Cynthia Lummis on April 17. This bill, known as the Lummis-Gillibrand bill, does not extensively address AML/CFT concerns.
Instead, Warren seems to have been referring to a bill expected to emerge from the House of Representatives, led by Finance Committee Chair Patrick McHenry and ranking member Maxine Waters. Warren sent a letter to them on April 8, expressing similar concerns as in her letter to Yellen.
In conclusion, Warren addressed the treasury secretary, emphasizing the need for stronger AML/CFT measures for stablecoins. Taylor Barr, a Senior Policy Associate at the Digital Chamber, commented on the situation, suggesting that Warren should also consider the consumer protection language, receivership text, and the enforcement power of the Federal Reserve and the Office of the Comptroller of the Currency (OCC).
Overall, there are concerns surrounding unstablecoins, including depegging, bank runs, and other risks that loom in the cryptocurrency market.