Janet Yellen believes digital assets could boost efficiency of the financial system, but also sees underlying risks.
President Joe Biden’s nominee to serve as United States secretary of the treasury and former chair of the Federal Reserve, Janet Yellen, said cryptocurrencies and other digital assets have the potential to improve the efficiency of the financial system. If the research confirms it, Yellen plans to work closely with regulators on implementing a regulatory framework in the fintech space, said the treasury nominee during the finance committee hearing.
“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. 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,” stated Yellen.
Yet, she noted that cryptocurrencies are used to finance terrorism, money laundering and other “malign activities” that undermine the US national security. Therefore, it’s important to look closely at how to encourage legitimate use of such assets, and at the same time curtail illegal actions.
In the past year the US regulators have been softening towards the idea of digital assets. In mid-January, the status of the first federally chartered digital asset bank was granted to Anchorage association. The Anchorage digital bank obtained a licence from the Office of the Comptroller of the Currency (OCC) allowing it to store digital assets, a move that could further give rise to institutional adoption.