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Elizabeth Warren Asks Treasury Secretary for Improved Stablecoin Regulation

Warren's advocacy for enhanced regulatory measures

Amid discussions on how to regulate the $157 billion stablecoin market, Senator Elizabeth Warren pushes for incorporating comprehensive anti-money laundering controls, highlighting gaps in the proposed Lummis-Gillibrand bill.

Key takeaways:

  • Senator Warren urges for inclusion of robust AML/CFT controls in future stablecoin legislation.
  • Current proposals, such as the Lummis-Gillibrand bill, lack significant mention of these measures.

United States Senator Elizabeth Warren has expressed her concerns regarding the regulatory oversight of stablecoins, emphasizing the necessity of stringent anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. In a recent communication with Treasury Secretary Janet Yellen, Warren referenced a November 2023 "letter to Congress" from the Treasury outlining the need for enhanced enforcement powers to close gaps in current regulations.

Warren pointed out: 

"Those authorities must be adopted into any legislation Congress advances to create a new regulatory framework around the $157 billion stablecoin market." 

Her remarks underscore the importance she places on embedding these controls within the legislative framework to ensure robust oversight of digital currencies.

Legislative context and criticisms

The discussion emerges in the context of the Lummis-Gillibrand bill, introduced in the Senate, which currently does not extensively address AML/CFT issues according to Warren's analysis. This omission has led Warren to look towards other potential legislative developments, possibly from the House of Representatives, spearheaded by Finance Committee chair Patrick McHenry and ranking member Maxine Waters.

Warren's assertive stance was further clarified in her letter dated April 8 to McHenry and Waters, reiterating her position that effective stablecoin legislation must incorporate 

"the full suite of AML tools that Treasury requested in its November 2023 letter to Congress as necessary to effectively combat that threat [of terrorism financing]."

Taylor Barr, a Senior Policy Associate at Digital Chamber, commented on the discourse, questioning the selective focus of Senator Warren’s public statements and pointing out omitted aspects of consumer protection in the Lummis-Gillibrand bill that could also merit attention.