The most powerful person in the American financial ecosystem has admitted that he sees healthy innovation in the world of cryptocurrencies that may be a healthy thing going forward. However, Treasury Secretary Janet Yellen admits that she is still concerned about the widespread use of digital assets.
Yellen has never been a fan of cryptocurrencies. During her tenure as chair of the Federal Reserve, she was an outspoken critic of cryptocurrencies, at one point openly stating that she is not a fan of Bitcoin. In February of last year, she told the New York Times that Bitcoin is “an extremely inefficient way to transact, and the amount of energy that goes into processing those transactions is staggering.”
However, as he now tells CNBC, he has slightly changed his mind about BTC. In an interview on Friday, she noted:
“ Crypto has obviously grown by leaps and bounds, and is now playing a significant role not so much in transactions but in the investment decisions of many Americans .”
Additionally, he referenced President Joe Biden’s executive order on cryptocurrencies, which he previously praised as important to protect American investors.
“I’m a little skeptical because I think there are valid concerns about it,” he continued. Some have to do with financial stability, consumer/investor protection, use for illicit transactions, and other things.”
“ On the other hand, cryptocurrencies have benefits and we recognize that payment system innovation can be a healthy thing.”
This is a huge step forward for Yellen, an influential figure in global financial policy who has previously claimed that nobody uses Bitcoin for transactions, and when someone does, “I’m afraid it’s often for illicit finance.”
As she has always done, Yellen insisted on the need to regulate the nascent sector. So far, the US has yet to formulate comprehensive policies to govern cryptocurrencies. Efforts have been made by individual agencies, including the SEC, the CFTC, FinCEN, the Department of Justice, and the IRS. However, these efforts have been scattered and in some cases even contradictory (such as the SEC and IRS definition of crypto).
