U.S Treasury Secretary Janet Yellen Says Cryptocurrencies Can Improve The Financial System
Janet Yellen, the newly appointed U.S. Treasury Secretary under President Joe Biden sparks new interest in cryptocurrencies acting that digital assets can improve the overall efficiency of the global financial system.
In her newly released report, Yellen writes: “Bitcoin and other digital assets and cryptocurrencies provide the ability to conduct financial transactions around the world. Like other technological developments, cryptocurrencies offer potential benefits for the United States and our allies. 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”.
However, Yellen is quite specific in her praised for cryptocurrencies and also highlights the flip side of possible “illicit financing”. While on one hand cryptocurrencies unlock new opportunities, Yellen also added that they undermine the interest of America at the other end.
“It is very important to consider the benefits of digital assets and the potential to improve the efficiency of our financial system. We already know that cryptocurrencies can be used to finance terrorism, money laundering and support criminal activities, which undermines US national security and the interaction of the American financial system with the world. I think we need to closely monitor the use of cryptocurrencies and prevent their use for criminal purposes,” Yellen said.
While blockchain and the crypto industry has come this far, there’s no proper regulatory stand from the lawmakers on this matter. Yellen said that she will be working closely with the Fed’s Board of Directors and other lawmakers “to create an effective regulatory framework for cryptocurrencies and other financial technology innovations”.
However, as per the Chainalysis report, the use of cryptocurrencies for illicit transactions has dropped considerably from 2.1% in 2019 to 0.34% in 2020.
On one hand, institutional participation in Bitcoin and cryptocurrencies continue to grow at an unprecedented rate. Eve trillion-dollar asset management companies like BlackRock have shown their interest in cryptocurrencies. It’s high time lawmakers come with a legitimate framework which will be better for the overall crypto industry.
Yellen’s comments just a week after ECB President Christine Lagarde called Bitcoin as a “speculative asset”. Lagarde also said that BTC is the potential source of money laundering.
As of writing this story, Bitcoin (BTC) is trading at $31,757 with a market cap of $591 billion. BTC entered sharp correction on Thursday but seems to have picked up its trajectory back northwards.