US Secretary softens stance on crypto but has “a little bit of skepticism”

U.S Secretary of the Treasury Janet Yellen acknowledged the benefits associated with cryptocurrencies, stating that the Treasury favored regulation that supports innovation in the space. Yellen in an interview on CNBC Friday said that crypto has grown by leaps and bounds, and is now playing a significant role mainly in investment decisions for Americans.

Admitting the growing role of the digital asset industry in the current landscape, Yellen who is also an economist and educator noted, “We recognize the innovation in the payment system can be a healthy thing,”

In early March, President Biden issued an executive order on cryptocurrencies that focused on consumer protection and the mitigation of crimes related to digital assets. Yellen then announced that the treasury is working to bolster itself against cyberattack threats.

“Cyber is a real risk and we recognize we have vulnerabilities, and we’re doing everything we can to be prepared to deal with that, and up to our defense,” Yellen said. The 78th secretary was known for being a vocal critic of the broader cryptocurrency industry during her time as Federal Reserve chair when in 2018, stated that she was “not a fan” of bitcoin.

The growing adoption of crypto might have softened her stance towards the industry. Yellen said she now has only “a little bit of skepticism,” citing concerns about financial stability, consumer investor protection, and crypto’s use for illicit transactions.

US President’s executive order signals regulations are on the way

Yellen’s gradual positive comments poured after the Biden Administration’s executive order earlier this month called for a “whole-of-government” approach to regulating crypto, which acknowledged the need to promote the important innovation that might come from the sector.

A year ago, Yellen, who is a Joe Biden’s pick for the Treasury Secretary sent shivers down investors’ spines when she proposed during her confirmation hearing that the use of digital currencies should be restricted as part of a wider clampdown on money laundering and terrorism financing. In February she again tested the industry’s nerve by issuing a warning that bitcoin is an “extremely inefficient” way to conduct monetary transactions.

Lipika Deka: Lipika is a crypto-journalist at TWJ. A graduate in economics and finance, she has a keen interest in the political and socio-economic facets of blockchain technology and the cryptocurrency industry.