Elizabeth Warren, a United States Senator, recently wrote a letter to Treasury Secretary Janet Yellen regarding Deputy Treasury Secretary Wally Adeyemo’s testimony before the Senate Banking Committee on April 9. In the letter, Warren reiterated her stance on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) measures for stablecoins, aligning with her statements during the hearing. Adeyemo’s appearance at the Senate hearing was to discuss the Treasury’s proposals for expanding sanctions powers to blockchain validator node operators, among other 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, as her letter was written a day before that. The Lummis-Gillibrand bill, which spans 179 pages, does not extensively address AML/CFT.
Instead, Warren may have been referencing a bill expected to emerge from the House of Representatives, led by Finance Committee Chair Patrick McHenry and ranking member Maxine Waters. On April 8, Warren sent a letter to McHenry and Waters expressing similar concerns to those in her letter to Yellen. In her conclusion to the treasury secretary, Warren stated:
Digital Chamber Senior Policy Associate Taylor Barr commented on the situation, possibly referring to the Lummis-Gillibrand bill, by questioning Warren’s perspective on the bill’s increased consumer protection language, added receivership text, and the enforcement power of the Federal Reserve and the Office of the Comptroller of the Currency (OCC). Barr noted that these points were conveniently left out of Warren’s talking points.
In the context of unstablecoins, there are concerns surrounding depegging, bank runs, and other risks that loom.
(Original source: Alexander Grieve)