Janet Yellen Talks Crypto, Central Bank Digital Currency in Latest Remarks

Andrew Harnik/AP/Shutterstock / Andrew Harnik/AP/Shutterstock

Treasury Secretary Janet Yellen made comments on digital asset policy on April 7, advocating responsible innovation of digital assets while assessing the risks they can pose.

Discover: 7 Financial Habits That Improve Your Everyday Life
More: Coinbase Fees: Here’s a full rundown on how to minimize fees

Yellen discussed the principles that will guide the Treasury’s approach to digital asset policy — and its work as part of President Biden’s executive order, “Ensuring Responsible Development of Digital Assets,” signed on March 9.

LIMITED TIME OFFER: Sign up for Gemini Crypto Exchange and get $7 in ETH. Start investing today with just $100.

“I won’t predict where this work will take us, but that doesn’t mean we’re navigating without a compass,” said Yellen at American University’s Kogod School of Business Center for Innovation. “Digital assets may be new, but many of the problems they present are not. We have enjoyed the benefits of innovation in the past and we have also experienced some unintended consequences.”

According to Ari Redbord – a former senior adviser to the US Treasury Department and now head of legal and government affairs at blockchain intelligence firm TRM Labs — Yellen’s speech was both comprehensive and far-reaching.

“She essentially built on Biden’s recent order to address issues in a more granular way,” Redbord told GOBankingRates. “She spoke about stablecoins, the issuance of a central bank digital currency and the need for oversight of the cryptocurrency industry. That said, the speech was overwhelmingly positive.”

Learn: 6 Alternative Investments to Consider for 2022

Redbord added that, like the executive decision, Yellen focused on the need for global collaboration and spoke about the idea of ​​responsible innovation.

“The speech was carefully written to draw the needle — on the one hand, it focuses on the need for regulation, but it also emphasizes the need for American leadership in the world and the need to promote responsible innovation,” he said. . Redbord added that her comments will be well received by the cryptocurrency industry as they help the adoption of the emerging technology – as well as recognition that we need to build the investor trust layer, a trust layer made up of “anti-money laundering.” “. tools, consumer protection and stability.”

Yellen said the adoption of cryptocurrencies for payments may be slow due to their recent volatility coupled with high fees and slower processing times than those associated with other forms of payment.

“In practice, you would find it difficult to use cryptocurrency to buy a sandwich or a liter of milk,” she said. “Other digital assets – such as stablecoins or potential central bank digital currencies (CBDCs) – could succeed in being more widely used as a medium of exchange, increasing potential benefits and risks.”

Yellen said Biden’s executive order instructed federal government experts to conduct in-depth analysis to balance responsible development of digital assets with the risks they pose. These tasks are guided by six policy objectives: protecting consumers, investors and businesses; protect financial stability against systemic risks; mitigate national security risks; promote US leadership and economic competitiveness; promote equal access to secure and affordable financial services; and to support responsible technological progress, taking into account key design considerations such as privacy, human rights and climate change.

“Over the next six months or so, Treasury will work with colleagues in the White House and other agencies to produce fundamental reports and recommendations related to these goals. In many cases, the work mandated by the executive order builds on Treasury’s ongoing efforts,” Yellen said.

See: SEC Chair Gary Gensler Wants To Regulate Crypto Platforms ‘Like Exchanges’
Search: Crypto Ownership: How Inflation, Regulation & More Led to Meteoric Rise in 2021

In terms of a CBDC, Yellen reiterated that under the order, the Biden administration will publish a report analyzing possible design choices and implications for payment systems, economic growth, financial stability, financial inclusion and national security.

“I don’t know what conclusions we’ll draw yet, but we need to be clear that issuing a CBDC would likely pose a major design and engineering challenge that would take years of development, not months,” she said. “So I share the president’s urgency to advance research to understand the challenges and opportunities that a CBDC could bring to American interests.”

More from GOBankingRates

About the author

Yael Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including: Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major New York City financial firms, including New York Life and MSCI. Yael is now a freelancer and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Université Toulouse-Jean Jaurès, France.

Related Posts

Leave a Reply

Your email address will not be published.