Janet Yellen, the new Treasury Secretary, has been put in a central role and is expected to push crypto regulations sometime in the next four years. While she has shared mixed feelings towards digital assets, she maintains that her primary objective is investor protection.
Investor Protection Takes Priority
This week, Yellen appeared in a CNBC interview where she touched several topics, including the prospect of crypto regulations. The Treasury Secretary explained that cryptocurrencies would need a special regulatory environment, as the government hopes to protect investors from their speculative nature and propensity to be used in criminal activities.
Sec Treasury Yellen just said on CNBC Bitcoin is used in criminal activity. Give me a break. And the US dollar isn’t. Who can believe these Academic Elites? Do they think we are that naive? Definitely buy more gold, silver, Bitcoin.
— therealkiyosaki (@theRealKiyosaki) February 18, 2021
The Treasury Secretary recently held a meeting with several other policymakers, including the Federal Reserve Bank, Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and New York Federal Reserve – over the GameStop saga of last month and its fallout.
At the meeting, the policymakers agreed that market practices worked reasonably well. However, Yellen remains committed to investor protection as far as cryptocurrencies are concerned.
All Eyes on Janet
This isn’t the first time Yellen will raise the issue of criminal activity in particular. As part of her Senate confirmation in January, she pointed out that digital assets remain a particular anti-money laundering (AML) concern that she hopes to mitigate in her tenure as Treasury Secretary.
“We need to make sure that our methods for dealing with these matters — with terrorist financing — change along with changing technology. Cryptocurrencies are a particular concern. I think many are used at least in a transaction sense mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels,” Yellen said.
Despite this, the policymaker has also pointed out that cryptocurrencies can improve the American financial system. In a written statement to the Senate Finance Committee, Yellen explained that she would look to harness cryptocurrencies’ potential to improve the financial system’s efficiency.
For now, Yellen has yet to adopt any particular policies that could harm the crypto industry. Of course, the Biden administration appears to be focusing on mitigating the coronavirus, and the Treasury Secretary has her hands full with managing its financial implications. However, all eyes will be on her in the coming months as she begins rolling out specific policy proposals.