Crypto Has ‘Benefits’ – Janet Yellen

American President Joe Biden’s Treasury Secretary nominee Janet Yellen has been blamed by many for the recent slide in token prices after expressing “concerns” about crypto – now many will hope that more positive comments on the matter could help halt the worsening decline.

Yellen has been communicating with the Senate’s Finance Committee ahead of a vote, expected today, on her nomination.

And in a set of responses to Committee member Senator Todd Young’s question on the matter, Yellen addressed,

“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 promptly followed this up with a familiar-sounding caveat; however, reporting,

“At the same time, we know they can be used to finance terrorism, facilitate money laundering, and support malign activities that threaten United States national security interests and the integrity of the United States and international financial systems.”

(However, according to Chainalysis, all cryptocurrency activity’s criminal share fell from 2.1% (USD 21.4bn) in 2019 to 0.34% or USD 10bn in transaction volume in 2020.)

But then she continued in a more positive vein, adding,

“I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities.”

Yellen concluded by saying that she intends “to work closely” with the Federal Reserve’s governing board and “other federal banking and securities regulators” on a plan to “implement an effective regulatory framework for these and other fintech innovations.”

Meantime, as cited by Young, bitcoin (BTC) “and other digital and cryptocurrencies” are “providing financial transactions around the globe,” adding that “this offers potential benefits” for the United States and its allies.

Earlier this week, Yellen informed the committee that “cryptocurrencies are a particular concern,” in the war against terrorist financing, adding that Washington needed “to make sure that our methods for dealing with these matters change along with changing technology,” continuing that “curtailing” the use of crypto by specific groups could be one of her intentions.