Key Takeaways:
- During an interview on Friday, US Treasury Secretary Janet Yellen highlighted crypto’s rising significance in American finance and stated that she will seek to create a legal framework that encourages continuing innovation.
- During her time as Federal Reserve chair, Yellen was renowned for being a vocal critic of bitcoin (BTC) and the broader cryptocurrency ecosystem, and later as a private person when she indicated in 2018 that she was “not a fan” of bitcoin.
- Yellen added that now that she is Treasury Secretary, she only has “a little amount of scepticism,” citing concerns about financial stability, consumer investor protection, and cryptocurrency’s use for criminal operations.
Interview with CNBC
In an interview with CNBC, US Treasury Secretary Janet Yellen discussed her thoughts about Crypto.
Yellen made the remarks about the crypt while being asked by Andrew Ross Sorkin of CNBC’s “Squawk Box.”
Sorkin asked Yellen what it said about where “we’re in a cryptocurrency” after Russia’s energy chief showed interest in accepting Bitcoin as a payment for oil and gas on Thursday (March 24).
Yellen responded,
“Well, crypto has apparently grown by leaps and bounds, and it now plays a significant role, not so much in transactions, but in the investment decisions of many Americans. And just a couple of weeks ago, the president issued an executive order instructing us and other agencies to consider regulating crypto.”
Sorked went on to ask Yellen if this indicated he was less skeptical of Crypto now than she had been previously.
Yellen expresses some skepticism, claiming that there are legitimate worries about it. Some of them have to do with financial stability, consumer investor protection, and the use of unlawful activities, among other things. On the other hand, crypto has proven to be advantageous, and we recognise that payment system changes can be beneficial.
“We would finally like to make recommendations that create a regulatory environment in which healthy innovation can emerge.”
During her time as Federal Reserve chair, Yellen was renowned for being a frequent critic of bitcoin (BTC) and the broader cryptocurrency ecosystem, and later as a private person when she indicated in 2018 that she was “not a fan” of bitcoin.
Yellen added that now that she is Treasury Secretary, she only has “a little amount of scepticism,” citing worries about economic stability, consumer investor protection, and cryptocurrency’s use for criminal operations.
The Biden Administration issued an executive order earlier this month advocating for a “whole-of-government” approach to crypto regulation, acknowledging the need to foster the crucial innovation that may emerge from the industry.
Past Statements by Janet Yellen on Crypto
Here are some statements made by Yellen about cryptocurrencies and blockchain technology while she was the Fed chair, according to a Coindesk piece published on November 24, 2020:
- “The Fed has no jurisdiction to supervise or control bitcoin in any way,” in February 2014.
- “We do not regard bitcoin’s popularity as having a relationship with the public’s assessment of the Federal Reserve’s conduct of monetary policy,” said the Federal Reserve in October 2015.
- “[Blockchain] might have very important ramifications for the payments system and the conduct of business,” according to a September 2016 report.
- “[Blockchain] is a very important, innovative technology that could have repercussions for the way transactions are handled throughout the financial system,” according to a statement from January 2017.
- “It [i.e. Bitcoin] is not a stable store of value, and it does not constitute legal money,” according to a statement from December 2017. It’s a high-risk investment.”
- “With respect to bitcoin, the Fed doesn’t really play any role, any regulatory role other than ensuring that banking organisations that we do supervise are vigilant in properly managing any interactions they have with market participants, and appropriately monitoring anti-money laundering [and] Bank Secrecy Act responsibilities that they have.”
- “I’ll just say right now that I’m not a fan [of Bitcoin], and let me explain why.” October 2018: “I’ll just say right now that I’m not a fan [of Bitcoin], and let me explain why. I know there are hundreds of cryptocurrencies, and perhaps something more enticing is on the way, but I believe that, first and foremost, bitcoin handles relatively few transactions, and many of those that do take place on bitcoin are unlawful, illegitimate transactions.”
- The Senate Committee on Finance held a hearing on the projected nomination of former Federal Reserve Chair Janet L. Yellen to Secretary of the Treasury on January 19, 2021.
Yellen believes it is critical to study the advantages of cryptocurrencies and other digital assets, as well as their potential to improve the financial system’s efficiency. At the same time, we must be aware that they can be used to fund terrorism, assist money laundering, and promote nefarious actions that endanger US national security objectives as well as the integrity of the US and international financial institutions.
She believes we should examine ways to encourage their usage for legitimate purposes while limiting their use for malicious and criminal purposes.
The Senate Committee on Finance held a hearing on the projected nomination of former Federal Reserve Chair Janet L. Yellen to Secretary of the Treasury on January 19, 2021.
The written responses for the record, which were released on January 21, 2021, begin on page 93.
“If confirmed, I intend to work closely with the Federal Reserve Board and the other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations.“
