Speaking on CNBC’s ‘Closing Bell’ program, newly confirmed Treasury secretary Janet Yellen said that Bitcoin regulation should focus on investor protection.
Yellen pointed to Bitcoin’s volatility and said it has been that way in recent years. She stated that “regulating institutions that trade with Bitcoin, making sure that they fulfill their regulatory responsibilities, I think is certainly important”.
She also pointed out the need to ensure that Bitcoin is not used for “illicit transactions”.
The Yellen Era
How the Treasury Department will proceed with the cryptocurrency remains unclear, given Yellen’s lack of details so far on the subject. As head of the Federal Reserve, she was cool about cryptography in general. However, as she did in the CNBC interview, she pointed directly to the use of Bitcoin in illicit transactions.
Yellen also called for better cooperation with other government agencies regarding crypto regulation. A 114-page paper draft of the department’s leadership under his command was distributed during Senate hearings. However, the project provides few details about this cooperation.
Digital dollar?
One area in which the Treasury Department will have to cooperate is in terms of the Central Bank’s digital currency (CBDC). However, a digital dollar is not a high priority, at the public level, for the Federal Reserve. As a former Federal Reserve chairman, Yellen showed little interest in creating a CBDC. The current president, Jerome Powell, showed no urgency and said earlier that “it is more important to get it right than to be the first.”
SEC Relations
Yellen will need to reach an agreement with a Securities and Exchange Commission that is changing direction. Yellen’s statement on closer cooperation resonates with the SEC’s own ‘Crypto Mom’, Commissioner Hester Pierce. In an interview on February 14, Pierce called for clarity and greater uniformity in Washington’s cryptocurrency regulations.
The SEC faces the side effects of a last-minute lawsuit by then-outgoing commissioner Jay Clayton, who filed a lawsuit against Ripple and two of his CEOs for the sale of a total of $ 1.8 billion in unregistered securities.
Ripple CEO Brad Garlinghouse says the company already has a government decision that it is not a security. In fact, Ripple’s XRP token is now licensed by the State of New York as a digital currency. However, the SEC has not commented on the XRP, so the confusion of regulations may still leave Ripple in trouble.
Focus
In the CNBC interview, Secretary Yellen focused on the latest round of economic stimuli related to COVID. The economic effect of the pandemic will remain his priority, but cryptocurrency problems are certain to increase under his mandate.
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