Janet Yellen Offers US Senate a More Nuanced Take on Crypto

“I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities,” Janet Yellen wrote.

AccessTimeIconJan 21, 2021 at 9:36 p.m. UTC
Updated Sep 14, 2021 at 10:59 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Janet Yellen thinks it is important the U.S. considers the benefits of cryptocurrencies along with the potential for misuse.

The Treasury Secretary nominee said that while cryptocurrencies can be used to finance terrorism and other illicit activities, they also have the potential to “improve the efficiency of the financial system,” according to a written response to the Senate Finance Committee. 

“I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities,” she wrote. “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.”

The written remarks, first published by Bloomberg, diverge slightly from her verbal response to a question about potential crypto use in terrorist financing, asked by Sen. Maggie Hassan (D-N.H.). At the time, Yellen called crypto a concern, saying she believes many are being used “mainly for illicit financing.”

These appear to be her first public comments on the cryptocurrency ecosystem since 2018, when she said that in her view many transactions were “illegal, illicit transactions.”

Yellen testified before the Senate Finance Committee on Tuesday ahead of a possible vote on her nomination. She has previously served as Chair of the Federal Reserve, the U.S. central bank, and has been a long-time economist.

During her confirmation hearing Tuesday, she said the U.S. would have to distribute more aid in the form of unemployment relief and support for public servants and local governments.

“Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” she said in her opening remarks. “In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”

A confirmation vote is expected Friday, according to The Hill.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.