In an annual report published on Friday, the United States Financial Stability Oversight Council, or FSOC, voiced its concern over the adoption of stablecoins and other digital assets. Regarding stablecoins, the FSOC said consumer confidence could be undermined by factors such as illiquidity, lack of appropriate safeguards, opacity regarding redemption rights, and cyber attacks. "A run on stablecoins during strained market conditions may have the potential to amplify a shock to the economy and the financial system," the report said. The report also alerted to developments in decentralized finance, or DeFi, where the use of high leverage could trigger a …

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter. As the market attempted to recover from last week’s pummeling, decentralized finance (DeFi) was once again the topic of discussion in high-profile U.S. governmental offices. Read on to learn more about this news and much more from the world of decentralized finance. What you’re about to read is the smaller version of this newsletter designed for brevity. For the full version of DeFi’s developments over the last week, drop your email below. Senator Warren warns about supposed DeFi dangers Senator Elizabeth Warren publicly scrutinized the decentralized finance sector this week …

The United States Securities and Exchange Commission (SEC) continues to delay decisions on Bitcoin (BTC) exchange-traded funds (ETF), issuing two fresh deadline extension notices. On Dec. 15, the SEC postponed two major Bitcoin exchange-traded offering proposals, including NYSE Arca's "actual" Bitcoin ETF, named Bitwise Bitcoin ETP Trust, and Grayscale Bitcoin Trust’s Bitcoin ETF. The SEC now expects to decide whether to approve or disapprove, or “institute proceedings to determine whether to disapprove” Bitwise’s BTC ETF and Grayscale’s BTC ETF on Feb. 1 and Feb. 6, respectively. “The Commission finds that it is appropriate to designate a longer period within which …

Wall Street financial advisor that helped Amazon acquire MGM studios this year is exploring crypto payment options. LionTree, a popular financial advisor and investment banking firm, is looking into cryptocurrencies as a payment option. In its year-end letter, Chairman and CEO Aryeh Bourkoff talks about crypto as a potential tool for empowering individuals and explores some of the biggest trends in crypto, such as decentralized finance (DeFi) and nonfungible tokens (NFTs). “In 2021, crypto made itself impossible to ignore, with a market cap at times surpassing $3 trillion," wrote Bourkoff, adding that this was because people with more cash than …

Former chairman of the U.S. Securities and Exchange Commission, or SEC, Jay Clayton, was appointed by ex-President Donald Trump to serve in 2017. In his tenure as head of the SEC, Clayton often defended Bitcoin (BTC) as a store of value. This past Wednesday, during an interview with CNBC's Squawk Box show, Jay shared his thoughts on cryptocurrency and how it should be regulated going forward. The former SEC chair said that he is a “huge believer in crypto technology” and that its efficiency advantages in the financial system and tokenization are enormous. "I am a huge believer in this …

Congressional lawmakers confirmed the nomination of Rostin Behnam, a commissioner at the Commodity Futures Trading Commission who had been serving as acting chairperson, to assume his position on a more permanent basis. In a Wednesday evening voice vote, members of the U.S. Senate approved President Joe Biden’s pick to lead the CFTC. Behnam has served as a commissioner since 2017 and acting chair following the departure of Heath Tarbert in January. Confirmed by voice vote: Executive Calendar #539 Rostin Behnam to be Chairman of the Commodity Futures Trading Commission. — Senate Cloakroom (@SenateCloakroom) December 16, 2021 At his confirmation hearing …

A bipartisan group of U.S. senators have called on Treasury Secretary Janet Yellen to clarify the language in the infrastructure bill signed into law by President Joe Biden around the tax reporting requirements on crypto. In a Tuesday letter, Senators Rob Portman, Mike Crapo, Pat Toomey, Mark Warner, Kyrsten Sinema, and Cynthia Lummis urged Yellen to “provide information or informal guidance” on the definition of “broker” in the recently passed infrastructure law, HR 3684. Under the current wording, people in the crypto space including miners, software developers, transaction validators and node operators are required to report most digital asset transactions …

United States Federal Reserve chair Jerome Powell hinted that though the government agency should consider monitoring developments in the crypto space, he didn’t see cryptocurrencies as a financial stability concern for U.S. markets. Addressing a question on crypto from Michael Derby of the Wall Street Journal on Tuesday, Powell supported the conclusions of a report from the President’s Working Group on Financial Markets released on Nov. 1. The report proposed that stablecoin issuers should be subject to “appropriate federal oversight” akin to that of banks, legislation that was “urgently needed” to address risks. “Stablecoins can certainly be a useful, efficient …

On Dec. 8, top executives from six major crypto companies faced the United States House of Representatives’ Financial Services Committee during a special hearing on digital assets. While the tone of the conversation was largely proclaimatory, the industry reacted with an optimistic buzz — it seems that crypto is bound to become a hot topic on the Hill for years to come. The meeting that took place in Congress also garnered much attention from mainstream media. What’s notable is the fact that this hearing is the first time that the industry’s senior leaders (aka “crypto moguls”) directly expressed the fears …

The Senate Committee on Banking, Housing and Urban Affairs heard from several expert witnesses with knowledge of stablecoins who urged lawmakers to establish a clear regulatory framework but could not seem to agree on where lines would be drawn. In a Tuesday hearing on “Stablecoins: How Do They Work, How Are They Used, and What Are Their Risks?”, Hilary Allen, a professor at the American University Washington College of Law, Alexis Goldstein, director of financial policy at Open Markets, Jai Massari, partner at Davis Polk & Wardwell, and Dante Disparte, chief strategy officer and head of global policy at Circle, …

Massachusetts Senator Elizabeth Warren did not hold back in her criticism of decentralized finance, expressing concern about how a run on stablecoins would affect the average investor. In a Tuesday hearing with the Senate Banking Committee discussing stablecoins, Warren questioned Professor Hilary J. Allen of the American University Washington College of Law as to whether a run on stablecoins could potentially endanger the U.S. financial system. Though Allen said an “en masse” redemption of stablecoins from people who had lost faith in the tokens would be unlikely to have “systemic consequences” for traditional markets at present, the DeFi system would …

Toy company MGA entertainment announced Tuesday that the first NFT-based cards for the L.O.L. Surprise trading card game are now available for purchase. The company entered into a partnership with digital asset consultancy firm Ioconic in September, and now hopes that the $25 billion L.O.L. Surprise brand will succeed in ushering its young fans into the NFT ecosystem. 10 million physical packs of the card game, containing 50 million individual cards, are to be delivered to global retailers before the end of the year, according to the announcement. L.O.L. Surprise collectors will receive a QR code that can be scanned …