US Treasury Secretary Janet Yellen says upcoming crypto regulations will nourish healthy innovation

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The US Trea­sury Sec­re­tary Janet Yellen joined CNBC’s Squawk Box this morn­ing and talked to Andrew Sorkin about Bitcoin.

Sec­re­tary Yellen talked about the over­all US econ­o­my and men­tioned she had her hopes high as the job mar­ket strength­ened and unem­ploy­ment num­bers dropped.

Lat­er, Sorkin men­tioned Russia’s recent announce­ment accept­ing Bit­coin pay­ments fo ener­gy pur­chas­es and asked where the US stands with the cryp­to conversation.

Sen­a­tor Yellen start­ed her response by acknowl­edg­ing Bitcoin’s expo­nen­tial growth as an invest­ment tool. She stated:

“Cryp­to has grown by leaps and bounds, and is now play­ing a sig­nif­i­cant role in the invest­ment deci­sions of lots of Americans.”

President Biden orders for action

It seems like Pres­i­dent Biden is also aware of Bitcoin’s impact and is get­ting ready to take it under con­trol. Accord­ing to Yellen, the Pres­i­dent issued an exec­u­tive order a few weeks ear­li­er and asked the trea­sury and oth­er agen­cies to pre­pare for cryp­to regulations.

Sec­re­tary Yellen had men­tioned this order a few weeks ear­li­er as well. On the 9th of March, she stat­ed on Biden’s cryp­tocur­ren­cy exec­u­tive order and said:

“Pres­i­dent Biden’s his­toric exec­u­tive order calls for a coor­di­nat­ed and com­pre­hen­sive approach to dig­i­tal asset pol­i­cy. This approach will sup­port respon­si­ble inno­va­tion that could result in sub­stan­tial ben­e­fits for the nation, con­sumers and businesses.”

The state­ment con­tin­ues by men­tion­ing the risks:

“It will also address risks relat­ed to illic­it finance, pro­tect­ing con­sumers and investors, and pre­vent­ing threats to the finan­cial sys­tem and broad­er economy.”

Risks and benefits

When Sorkin asked Sec­re­tary Yellen about her opin­ions on cryp­to, she said there were valid con­cerns around cryp­to, but she also saw the ben­e­fits of it too. Major­i­ty of her con­cerns revolved around the issues of secu­ri­ty. She said:

“I think there are valid con­cerns around it. Some have to do with finan­cial sta­bil­i­ty, con­sumer and investor pro­tec­tion, use for illic­it trans­ac­tions, and oth­er things. On the oth­er hand, there are also ben­e­fits from crypto.”

Upcoming US regulations

After sum­ma­riz­ing their main con­cerns regard­ing cryp­to, Sec­re­tary Yellen assured that they were also aware of the ben­e­fits. She men­tioned that inno­va­tion could have a heal­ing effect on the finan­cial sys­tems as long as its ‘healthy.’

With that, she also hint­ed at the nature of the upcom­ing US reg­u­la­tions as advi­so­ry rules that ensure the healthy growth of cryp­to. She said:

“We rec­og­nize that inno­va­tion in the pay­ment sys­tem can be a healthy thing. We would like to come out even­tu­al­ly with rec­om­men­da­tions that will cre­ate a reg­u­la­to­ry envi­ron­ment in which healthy inno­va­tion can grow”

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