According to the Janet Yellen statement in the US Senate, cryptocurrencies could undergo renewed regulatory scrutiny over the next four years. “Cryptocurrencies are a particular concern,” Yellen responded. “I think many are used at least in a transaction sense mainly for illicit financing.”
Janet L. Yellen, a labor economist and former chair of the Federal Reserve and now US Secretary of the Treasury, steps up as President Biden’s primary lieutenant at a challenging economic moment when the current administration is seeking to stimulate an economy that has been struck by the coronavirus.
We are excited to welcome Janet Yellen to Treasury, the 78th Secretary to lead this historic Dept. We know she will guide us to meet the challenges of our present moment & make a better economy—one built of possibilities, dignity, & the pursuit of happiness. For everyone.
— Treasury Department (@USTreasury) January 26, 2021
The statements made by Yellen indicated that the Biden administration might be adverse to cryptocurrency. Watchdogs groups around the world have recently raised worries over cryptocurrencies like Bitcoin, from the European Central Bank to the United Kingdom’s financial regulator. The remarks by Yellen echoed those of ECB President Christine Lagarde, who said last week that Bitcoin was used for some “totally reprehensible money laundering activity.”
But Yellen, during her Senate Finance Committee hearing, lightened her stance on cryptocurrencies, noting that they also offer some advantages. “Bitcoin and other digital and crypto-currencies are providing financial transactions around the globe, like many technological developments, this offers potential benefits for the U.S. and our allies. I think it’s important we consider the benefits of crypto-currencies and other digital assets and the potential they have to improve the efficiency of the financial system” Yellen said. However she kept stressing the dark side of cryptocurrencies.
Regulators may aim to regulate Bitcoin exchanges designed to enable consumers to convert digital money into dollars, pounds or euros, rather than attempting to regulate crypto-currency networks that may not be located in the U.S. and may not be regulated by any particular person or entity.
In December, a branch of the Treasury Department probing money laundering, the Financial Crime Enforcement Network, drafted new regulations forcing crypto-currency exchanges to file information on any transaction worth more than $10,000. In addition, for all transfers over $3,000 that users send to private “unhosted wallets,” including the name of the person who made the transfer, the proposed new regulations will also mandate records to be preserved.
In the last administration, the proposed new regulations were not enforced. What Yellen will do remains unclear, but her comments indicate that the Biden administration will introduce new regulations.
Marshall Hayner, CEO of Metal, the first digital crypto banking platform formed in 2016 wrote in The Hill, we have bootstrapped this industry from the beginning. Now we’re eager to cooperate with the government to make the traditional and decentralized financial industries integrate seamlessly. We all benefit when regulators and innovators work together; let’s do that once again.
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— Fyggex (@fyggexchange) August 12, 2020
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