Joe Biden’s decision to become the new US Treasury Secretary Janet Yellen has clarified her stance on Bitcoin and cryptocurrencies. This follows her remarks during a Senate hearing when she said that cryptocurrencies are mainly used for illegal funding.
Janet Yellen clears up her crypto plans
Janet Yellen clarified her position on cryptocurrency regulation in a written testimony released Thursday following the Senate hearing on her appointment as Treasury Secretary. During the hearing, Yellen made some statements about cryptocurrencies that were heavily criticized as inaccurate.
The finance committee first briefly described the benefits and risks of Bitcoin and other cryptocurrencies. “Bitcoin and other digital and cryptocurrencies offer financial transactions around the globe, as do many technological developments. This offers potential benefits for the US and our allies,” the written testimony read. “At the same time, it also provides opportunities for states and non-state actors to bypass the current financial system and undermine American interests. For example, the Chinese central bank has just issued its first digital currency. “
“DR. Yellen, what do you see as the potential threat and benefit of these innovations and technologies to US national security? Do you think more needs to be done to ensure that we have adequate safeguards and regulations for digital currencies and cryptocurrencies?” The finance committee asked the candidate for finance minister.
Yellen responded, “I think it’s important to consider the benefits of cryptocurrencies and other digital assets, as well as the potential they have for improving the efficiency of the financial system.”
She continued, “At the same time, we know they can be used to finance terrorism, facilitate money laundering, and assist with malicious activities that threaten the US national security interests and the integrity of the US and international financial systems.”
I think we need to look carefully at how to encourage their use for legitimate activities while restricting their use for malicious and illegal activities.
“If this is confirmed, I intend to work closely with the Federal Reserve Board and other federal banking and securities regulators to create an effective regulatory framework for this and other fintech innovations,” Yellen concluded.
Yellen’s clarification slightly mitigates her stance on cryptocurrency, contrary to what she said earlier during her Senate confirmation hearing. “Cryptocurrencies are a particular concern. I think a lot is used … mainly for illegal funding and I think we really need to look into how we can limit their use and ensure that anti-money laundering does not take place through these channels, “Yellen said a few days earlier.
Last week, the President of the European Central Bank (ECB), Christian Lagarde, also made a statement on Bitcoin that generated a lot of criticism. She said Bitcoin “did some fun business and some interesting and totally objectionable money laundering activity.” Many were also quick to point out how wrong Lagarde was, including a famous economist who said her testimony was “outrageous”. He stressed, “We all know that the vast majority of money laundering around the world is done in fiat currencies, particularly US dollars and euros.”
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