U.S. Treasury Secretary nominee Janet Yellen acknowledges potential benefits of crypto

Janet Yellen, who was recently nominated by US President Joe Biden for the post of Treasury Secretary, said that it is “important to consider the benefits of cryptocurrencies,” according to her written testimony published today.

“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 said, replying to a question about potential threats and benefits of cryptocurrencies.

A more nuanced approach

As CryptoSlate reported, Yellen drew a direct parallel between illicit activity and cryptocurrencies during the US Senate Committee on Finance hearing earlier this week, raising some concerns in regard to her overall stance toward digital assets.

However, Yellen’s written testimony left much more space for nuance, revealing a bit more balanced approach.

“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 explained.

Yellen testimony much more in line with what broader Treasury policy has been on crypto since 2013…market overreacted….trigger happy bull market selling…. https://t.co/2sbvjvAH2N

— Jeremy Allaire (@jerallaire) January 21, 2021

Simultaneously, Yellen didn’t omit the fact that cryptocurrencies could be used for shady purposes, stressing that respective agencies should continue to fight all manners of illegal financial activities—including crypto-related ones.

“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,” she added.

This is especially important for the crypto industry because as the US Department of the Treasury Secretary, Yellen would also oversee the Financial Crimes Enforcement Network (FinCEN), a bureau that aims to combat terrorism financing and money laundering.

Recently, the FinCEN made quite a few headlines by proposing several new crypto wallet regulations that many privacy advocates and crypto experts deemed onerous and rushed. However, the Biden administration gave the crypto industry some breathing room yesterday by putting all “new or pending” regulatory rules on hold.