Yellen Recognizes the ‘Benefits of Crypto’ & Only Suggests Curtailing Its Use in Illegal Activities
The Treasury Secretary-nominee also agrees on ensuring adequate input from stakeholders regarding Steven Mnuchin’s proposed FinCEN rule and intends to “ensure a full and substantive review of the proposals.”
Treasury Secretary Janet Yellen’s concern about cryptocurrencies’ use in illicit activities made some waves in the crypto market and pushed some to sell their BTC.
However, while Yellen is not a fan of Bitcoin, in her written testimony, she took a more nuanced approach to digital currencies used to “circumvent the current financial system and undermine American interests.” Yellen wrote in her nomination hearing record,
“I think it important we consider the benefits of cryptocurrencies and other digital assets and the potential they have to improve the efficiency of the financial system.”
She also noted that crypto “can be used to finance terrorism, facilitate money laundering, and support malign activities that threaten U.S. national security interests and the integrity of the U.S. and international financial systems.”
But for this, she suggests looking closely at it and “curtailing their use for malign and illegal activities” in collaboration with the Federal Reserve and other banking and securities regulators regarding the regulatory framework.
Regulatory Framework to Foster Innovation
In response to the U.S. Senator Steve Daines of Montana’s question of China rapidly innovating in the digital asset space, Yellen further said that she believes “the United States must be a leader in the digital asset and financial technology areas.”
As such, calling for a regulatory framework that “fosters innovation and promising new technologies while addressing legitimate concerns” about their use like terrorism financing.
She further commented on Steven Mnuchin’s proposed rule in Dec. 2020 that requires exchanges to store customers' information transacting more than $3k in crypto per day and report those above $10k.
Yellen said she is aware of the rules proposed and “agree on the need to ensure adequate consultation with and input from stakeholders. If confirmed, I intend to ensure a full and substantive review of the proposals, which will include an assessment of how to ensure proper input from stakeholders.”
Besides crypto, during her nomination hearing, her call for “fiscal stimulus” being the “most urgent priority” provides a bullish tailwind for Bitcoin and cryptocurrencies.
“I’ve called for more fiscal support since the early days of the pandemic and continue to do so,” she added, “The combination of persistently low rates and the need for investing” in the environment “will produce returns in the years ahead and leave future generations better off.”