2024-04-18
The senator is pushing for new sanctions authority to be included in the stablecoin legislation. However, the Lummis-Gillibrand bill falls short of her expectations.
Senator Elizabeth Warren of the United States has written a letter to Treasury Secretary Janet Yellen, addressing Deputy Treasury Secretary Wally Adeyemo's testimony before the Senate Banking Committee on April 9.
In her letter, Warren emphasized the importance of Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) measures.
Warren Expressed her support for comprehensive AML/CFT regulations for stablecoins in her letter. Adeyemo had appeared at the Senate hearing to discuss various Treasury proposals, including expanding sanctions powers to blockchain validator node operators.
In response to gaps in current regulation, the Treasury outlined its enforcement goals in a document referred to as a "letter to Congress" dated November 2023. Warren stated:
"These authorities must be incorporated into any legislation that Congress moves forward with to establish a new regulatory framework for the $157 billion stablecoin market."
It appears that Warren was not referring to the stablecoin bill introduced by Senators Kirsten Gillibrand and Cynthia Lummis on April 17, which almost completely neglects AML/CFT.
Instead, she may have been alluding 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 them a letter on April 8, expressing similar concerns as in her letter to Yellen. In conclusion, Warren stated:
"Stablecoin legislation [...] must include the full set of AML tools that Treasury requested in its November 2023 letter to Congress, as they are necessary to effectively combat the threat of terrorism financing."
Taylor Barr, Digital Chamber Senior policy Associate, commented on the matter, possibly referring to the Lummis-Gillibrand bill.
Barr mentioned the need for Senator Warren's opinion on the bill's increased consumer protection language, added receivership text, and the enforcement power of the Fed/OCC. These aspects were conveniently omitted from her talking points.
