U.S. Treasury Secretary Yellen Sees the Benefits of Crypto

U.S. Treasury Secretary Yellen Sees the Benefits of Crypto

 

U.S. Treasury Secretary Janet Yellen has admitted that there are benefits to cryptocurrency. Cryptocurrencies have grown by leaps and bounds and are now "playing a significant role" in the investment decisions of lots of Americans. Yellen went on to add that the Treasury Department is working on regulatory recommendations for healthy innovation.

Earlier, the Treasury Department and other federal agencies had said they would evaluate the impact of bitcoin on financial stability and national security as part of the executive order signed on March 9. It needs to be understood that the effort by the American government to regulate the crypto business focuses on consumer safety, financial stability, illicit uses, and leadership in the global financial sector through financial inclusion and responsible innovation.

A senior administration official, who had previewed the directive, clarified that the Biden administration sees the exploding popularity of cryptocurrency as a demand to act quickly to examine the risks and benefits of digital assets. Some experts have also speculated that the Kremlin could use crypto to evade sanctions imposed by the West.

The Treasury Department's March 8 release said that its financial literacy arm would work to develop consumer-friendly materials to help people "make informed choices about digital assets."

The United States Under Secretary of the Treasury for Domestic Finance, Nellie Liang, said: "History has shown that, without adequate safeguards, forms of private money have the potential to pose risks to consumers and the financial system."

Yellen had earlier revealed that the Treasury will monitor crypto to see whether it is being used to evade sanctions by Russian individuals and entities.

"We will continue to look at how the sanctions work and evaluate whether or not there are leakages, and we have the possibility to address them," she said. However, a senior official with the department subsequently said that the Treasury does not see that crypto could be used in a large-scale way to evade sanctions.

However, all that skepticism seems to have softened for the better. In an interview with CNBC on Friday, U.S. Treasury Secretary Janet Yellen spoke about cryptocurrency. She was asked about cryptocurrency, given that Russia has said it is considering accepting bitcoin as payment for energy resources.

Yellen replied:

Crypto has obviously grown by leaps and bounds and it’s now playing a significant role, not really so much in transactions, but in the investment decisions of lots of Americans.

She further explained that President Joe Biden’s executive order tasks the treasury department and other federal agencies with "thinking about the regulation of crypto."

When asked about whether she is still skeptical about crypto, the treasury secretary commented:

I have a little bit of skepticism because I think there are valid concerns around it. Some have to do with financial stability, consumer-investor protection, use for illicit transactions, and other things.

She added:

On the other hand, there are benefits to crypto, and we recognise that innovation in the payment system can be a healthy thing.

"We would like to come up eventually with recommendations that will create a regulatory environment" for healthy innovation, she opined.