Janet Yellen Intends New Crypto Industry Rules
During the confirmation hearing for the new Treasury Secretary, Janet Yellen repeated the already familiar list of illegal uses of cryptocurrency and promised that her approach would not be “indifferent”.
US government changes VS crypto industry
In written responses to questions regarding her confirmation as U.S. Treasury Secretary, Janet Yellen says she will work closely with a number of government agencies to implement new regulations related to cryptocurrencies.
Asked about the benefits of digital currencies and whether there are sufficient safeguards in place in the US regarding their use, Yellen said digital currencies have the potential to “improve the efficiency of the financial system” and it is important to consider the benefits they offer.
At the same time, she said cryptocurrencies can be used to “finance terrorism, facilitate money laundering, and support malicious activities that threaten the interests of national security and the integrity of the U.S. and international financial systems”.
While the Trump Treasury team has paid little attention to the crypto sector, Yellen has indicated that this will not be the same for the Biden administration. She said the incoming administration will need to look closely at how to encourage the legitimate use of cryptocurrencies, at the same time as it works to restrict its use for illegal activities. “I intend to work closely with the Federal Reserve Board of Directors and other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations.”
Cautious Optimism regarding Cryptocurrency
It was also confirmed that Gary Gensler was appointed to the role of chairman of the Securities and Exchange Commission (SEC).
News of Gensler’s likely appointment was met with mixed reactions. Gensler has a track record of imposing stricter rules on excesses on Wall Street, having taken a relatively low-key approach during Jay Clayton’s tenure as chairman under the Trump administration.
However, the crypto sector is cautiously optimistic about the news, because Gensler would be the most knowledgeable person about the crypto industry heading the SEC. He is a Professor of Global Economics and Management Practice at the MIT Sloan School of Management, as well as co-director of MIT’s Fintech @ CSAIL and Senior Advisor to the MIT Media Lab Digital Currency Initiative.
Gensler has spent the past four years teaching a number of technical courses on blockchain at the Massachusetts Institute of Technology. While it would be wrong to describe Gensler as a crypto enthusiast, he is very well versed in the perceived risks and benefits of blockchain-based assets, as well as the subtle features of the crypto space.
In a 2019 article for Coindesk, Gensler wrote ,” I remain intrigued by Satoshi’s innovative potential to drive change, directly or indirectly as a catalyst. The potential for reducing verification and networking costs is noteworthy, especially for reducing economic rents and data privacy costs, and for promoting economic integration.”
Gensler went on to write that we are already living in the digital money age, stating that cryptocurrencies and blockchain have already caused real change and can continue to do so.
If Gensler is confirmed as the head of the SEC, he will take over the agency, which will lead most of the regulatory actions of the US government in relation to the blockchain industry. This includes a renewed discussion regarding the consideration of the long-awaited Bitcoin ETF.