Janet Yellen Stresses Need for Central Bank Digital Currency Work
The U.S. Treasury Secretary also reiterated the need for regulation in light of the recent turmoil in the crypto industry.
Washington D.C. — U.S. Treasury Secretary Janet Yellen on Wednesday reiterated the importance of building a regulatory framework for digital assets, referencing Terra as one possible danger and the tether stablecoin's “breaking the buck” as a result of the crypto crash.
In a conversation at the International Monetary Fund’s (IMF) annual meeting here, Yellen said that while there are more existing regulations “than people think” that can be applied to crypto, there are also many “holes” that need to be addressed.
Yellen said she would like to work with Congress to fill those holes as digital finance is “a tough thing to regulate,” she said.
As for a U.S. central bank digital currency, Yellen thinks a CBDC has advantages and the potential to solve many problems. While the process of creating a CBDC could take many years, it is “certainly worth getting involved in developing.”
“We can continue to think about whether it’s right to implement,” she said, but the U.S. should be “in a position where we could issue one.”
Last week, the Financial Stability Oversight Council (FSOC), of which Yellen is a member along with Federal Reserve Board Chair Jerome Powell, among others, published a report asking Congress to step in to provide guidance on what should be the limits of securities regulation.
UPDATE (Oct. 13, 2022, 21:18 UTC): Updates headline.
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