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21 Jan 2021

Yellen: US government should consider benefits of cryptocurrencies and digital assets

Yellen: US government should consider benefits of cryptocurrencies and digital assets

Treasury Secretary nominee Janet Yellen, who previously headed up the U.S. Federal Reserve, said in written testimony on Thursday that cryptocurrencies and digital assets have the potential to "improve the efficiency of the financial system."

As she noted in her written remarks"Bitcoin and other digital and cryptocurrencies are providing financial transactions around the globe. Like many technological developments, this offers potential benefits for the U.S. and our allies."

"At the same time, it also presents opportunities for states and non-state actors looking to circumvent the current financial system and undermine American interests. For example, the Central Bank of China just issued its first digital currency," she continued.

When asked specifically about her views on the potential benefits and risks, Yellen wrote:

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

"If confirmed, I intend to work closely with the Federal Reserve Board and the other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations," she concluded.

Her comments reflect those made earlier this week during Yellen's ongoing confirmation process, in which she struck a measured tone on the subject of cryptocurrencies. In response to one senator's question, Yellen voiced support for curbing the illicit use of cryptocurrencies.

U.S. President Joe Biden, who was inaugurated on Wednesday, nominated Yellen to lead the Treasury Department in November. 

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