Janet Yellen, the United States Treasury Secretary, expressed her belief that Congress should address the gaps in digital asset regulation, as some of these gaps could pose risks to investors or the financial system.
During a hearing on February 6th regarding the Financial Stability Oversight Council’s annual report, Representative Patrick McHenry, the Chair of the House Financial Services Committee, questioned Yellen about her stance on pending legislation that aims to regulate stablecoins and provide regulatory clarity in the cryptocurrency space. Yellen emphasized the importance of regulation in certain areas, such as protecting wallet holders and overseeing stablecoin issuers.
The following day, Representative Maxine Waters disclosed that Democrats and Republicans are nearing a consensus on a shared vision for stablecoin regulation. Waters has been in discussions with McHenry on this matter for over 20 months. The main point of contention has been how the Federal Reserve would supervise the stablecoin market and whether it would establish rules regarding stablecoin issuance.
Jeremy Allaire, the CEO of Circle, recently expressed his optimism that the United States will enact much-needed stablecoin legislation by 2024. Circle, the company behind the stablecoin USD Coin (USDC), has been actively advocating for stablecoin regulation in recent years. In late 2021, Circle started lobbying efforts in partnership with strategic consulting firm Invariant, and it is estimated that they have spent $760,000 on these efforts thus far.
In South Korea, the government has introduced updates to the Virtual Asset Users Protection Act, which includes regulations specifically targeted at cryptocurrencies to safeguard investors from fraudulent activities in the market. The new legislation prohibits the use of “undisclosed important information” in relation to cryptocurrencies, market manipulation, and illegal trading. Violators of these regulations can face severe criminal penalties, including imprisonment for more than one year or fines up to three to five times the amount of illegal profits. The Financial Services Commission (FSC) has stated that individuals who generate over 5 billion won ($3.8 million) through illegal cryptocurrency trading schemes could face life sentences.
The European Commission has proposed guidelines for tech platforms like TikTok, X, and Facebook to detect and address artificially generated content in order to protect the integrity of upcoming European elections. The commission has launched a public consultation on proposed election security guidelines for large online platforms and search engines. These recommendations aim to mitigate the risks posed by generative artificial intelligence (AI) and deepfakes to democratic processes. The draft guidelines suggest various measures to address election-related risks, including specific actions related to generative AI content, risk mitigation planning before or after an election, and clear guidance for European Parliament elections.
In Kenya, there has been public backlash against the proposed 2023 Robotics and Artificial Intelligence Society Bill. Kenyan information technology professionals have urged the parliament to reject the bill, citing numerous flaws. During a session organized by the National Assembly’s Communication, Information, and Innovation Committee to mark International Safer Internet Day in 2024, stakeholders in the AI and robotics fields expressed their disappointment at not being involved in any stage of the bill’s drafting process.
The proposed legislation aims to impose penalties, including fines of up to one million Kenyan shillings ($6,269), a potential two-year prison sentence, or both, on unlicensed entities operating in the robotic and AI industries if they fail to register with the Robotics Society of Kenya.