- US Treasury Secretary Janet Yellen has conceded to the argument that Bitcoin has some recognizable benefits.
- The crypto skeptic stated that the industry still requires government regulation to sanitize the sector.
- She sounded warnings that Russian entities and bodies could be turning to cryptocurrencies as a way to circumnavigate sanctions.
Janet Yellen told CNBC that cryptocurrencies could offer a wide range of benefits if it is properly harnessed. Cryptocurrency supporters are hopeful that her comments would convince other crypto critics to see the light.
Yellen Acknowledges Cryptocurrencies
Treasury Secretary Janet Yellen told CNBC over the weekend that she sees a silver lining in the cloud for cryptocurrencies despite the incidences of hacks and exploits. Her comments were coming on the heels of a flurry of activity in the space from the recent executive order and concerns over misuse by Russia.
“Crypto has obviously grown by leaps and bounds and it’s now playing a significant role, not really so much in transactions, but in investment decisions of lots of Americans,” Yellen said. Asides from the use of stablecoins, a study showed that a large number of Americans viewed cryptocurrencies as a store of value and as a hedge against the scourge of inflation.
She highlighted a host of problems that have traditionally bedeviled the ecosystem including financial stability from volatility, usage in illegal activity, and the absence of a proper framework to protect investors. Yellen told CNBC that notwithstanding the flaws of cryptocurrencies, there are immense benefits to be reaped and she recognizes “that the innovation in the payment system can be a healthy thing.”
Yellen opined that the fastest route to achieve the positives is to make recommendations to create a regulatory environment that will stimulate innovation and protect investors.
Even Bigger Concerns For Yellen
Yellen identified even larger concerns for cryptocurrencies, stating that the asset class could be used by Russia to bypass sanctions. She stated that regulators are looking at the nature of the sanctions in detail to “evaluate whether or not there are leakages, and we have the possibility to address them.”
Yellen’s fear has been re-echoed across Europe where Christine Lagarde, President of the European Central Bank believes that crypto is being used to circumnavigate sanctions. In response, the Justice Department launched a task force to stifle any attempts while Coinbase announced that it had shut down 25,000 Russian wallets on grounds of suspicious activity.
However, some pundits have argued that it is nearly impossible for Russia to switch to cryptocurrencies because of the liquidity in the markets. Nellie Liang, Treasury Undersecretary for Domestic Finance, told reporters that “at this point, we just don’t see that it could be used in a large-scale way to evade sanctions.”