Joe Biden’s choice to become the new U.S. Treasury secretary, Janet Yellen, clarified his position on bitcoin and cryptocurrencies. This follows her comments during a Senate hearing, when she said that cryptocurrencies are mainly used for illicit financing.
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Janet Yellen clarified her position on cryptocurrency regulation in a written deposition published on Thursday after the Senate hearing on her appointment as Treasury secretary. During the hearing, Yellen made some statements about cryptocurrencies that were strongly criticized as inaccurate.
The financial committee began by briefly describing the benefits and risks of bitcoin and other cryptocurrencies. “Bitcoin and other digital currencies and cryptocurrencies are providing financial transactions around the world, like many technological developments, this offers potential benefits for the U.S. and our allies,” says the written statement. “At the same time, it also presents opportunities for state and non-state actors who seek to bypass the current financial system and undermine American interests. For example, the Central Bank of China has just issued its first digital currency. “
“Dr. Yellen, what do you see as the potential threats and benefits that these innovations and technologies will have for 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 Treasury secretary candidate.
Yellen replied, “I think it’s important to consider the benefits of cryptocurrencies and other digital assets, and the potential they have for improving the efficiency of the financial system.”
She continued: “At the same time, we know that they can be used to finance terrorism, facilitate money laundering and support malignant activities that threaten US national security interests and the integrity of US and international financial systems” , elaborating:
I think we need to examine closely how to encourage its use for legitimate activities and, at the same time, restrict its use for evil and illegal activities.
“If confirmed, I intend to work closely with the Federal Reserve Board and other federal banks and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations,” concluded Yellen.
Yellen’s clarification marginally softens his position on the cryptocurrency, in contrast to his earlier statements made during his confirmation hearing in the Senate. “Cryptocurrencies are a particular concern. I think many are used … mainly for illicit financing and I think we really need to look at ways to restrict their use and ensure that money laundering (sic) does not take place through these channels, “said Yellen a few days earlier.
Last week, European Central Bank (ECB) President Christian Lagarde also made a statement about bitcoin that drew a lot of criticism. She said that bitcoin “did some funny business and some interesting and totally reprehensible money laundering activities”. Many were also quick to point out how wrong Lagarde was, including a famous economist who said his statement was “outrageous”. He stressed that “we all know that the vast majority of money laundering worldwide is conducted in fiat currencies, mainly in dollars and euros.”
What do you think of Janet Yellen’s later observations on bitcoin? Let us know in the comments section below.
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