The U.S. Treasury and other regulatory agencies are already working on cryptocurrency regulations, weeks after president Joe Biden signed an executive order outlining his government’s policy objectives concerning cryptocurrencies, treasury Secretary Jannet Yellen has said.
Speaking Friday to CNBC, Yellen noted that they were engaging not only regulators in the financial realm but also players in the crypto industry in a bid to come up with cogent cryptocurrencies and digital assets regulations.
“There are benefits from crypto and we recognize that innovation in the payment system can be a healthy thing,” Yellen told CNBC’s Andrew Ross Sorkin. “We would like to come out eventually with recommendations that will create a regulatory environment in which healthy innovation [thrives].”
The former Federal Reserve Chair also acknowledged the massive rate at which cryptocurrencies had grown, throwing her weight around the need to act swiftly in regulating the nascent industry.
“Crypto has obviously grown by leaps and bounds and it’s now playing a significant role,’ Yellen said, “not really so much in transactions but in investment decisions for lots of Americans.”
Whereas the crypto industry only forms about 0.04% of the world financial sector, Yellen stated that it poses various risks moving into the future, the more reason sound regulations on digital assets, and more so cryptocurrencies had to be created.
“I have a little bit of skepticism because there are valid concerns around it,” she went on. “Some have to do with financial stability, consumer investor protection, use for illicit transactions and other things.”
Asked about Russia’s decision to accept Bitcoin for oil exports, she added that they were ‘worried about the energy sector and were ‘focused especially on building the financial sector.
Mid this month, the U.S. and its allies intensified their Sanctions against Russia, agreeing to turn off Russia’s gas taps. In the aftermath of this decision, Putin responded by demanding ‘unfriendly’ nations pay for natural resource exports in the Ruble, Bitcoin, and gold, throwing the U.S. off balance. Russia also poses the risk of cyber threats most of which are facilitated using cryptocurrencies. On the issue, Yellen said they were working with firms in the industry by sharing information and preventing possible threats.