Treasury Secretary Janet Yellen, one of the most respected names in the USA when it comes to regulations, makes statements that closely concern Bitcoin and altcoins. One of the highlights is “the regulatory framework should foster innovation in crypto”.
Cryptocurrencies should be supported and compatible with the traditional financial system
Speaking today at 17:30, Yellen highlights the need for a regulatory framework to support regulations in the cryptocurrency market. This is in line with the latest executive order issued by the white house that aims to impose surveillance on the crypto market. Here is part of Yellen’s talk at the American University in Washington:
Our regulatory frameworks must be designed to support responsible innovation, especially when managing risks that can disrupt the financial system and economy. As banks and other traditional financial firms become more involved in cryptocurrency markets, regulatory frameworks will need to appropriately reflect the risks of these new activities.
Mainstream financial systems should be careful with Bitcoin and altcoin transition
Banks and other financial institutions have shown more interest in cryptocurrencies recently. According to reports, some banks are starting to include crypto in their employees’ savings plans and encourage them to invest in crypto. Yellen says the regulatory framework needs to highlight these risks so that mainstream financial institutions adopting cryptocurrencies need to be aware and make informed decisions.
Smart contract technology, which has seen increasing adoption due to the compatibility of cryptocurrencies with finance and distrust of central institutions, are among the other topics Yellen mentioned. The Secretary of the Treasury says that the new technology is evolving in line with finance:
Cryptocurrencies may be new, but they are part of the digitization of finance that has been underway for decades. In 1990 there were less than 3 million internet users. We currently have about 4.5 billion. We understand that many parts of our financial life can be controlled by small internet-connected gadgets that fit in our hands.
Yellen’s remarks on President Biden’s steps to be taken in administration in the next 6 months:
To experts in the federal government, President Biden’s Executive Order on cryptocurrencies instructed to conduct in-depth analysis to balance the responsible development of coins with the threats they pose. Six policy objectives will guide these efforts: first, to protect consumers, investors and businesses; second, to protect financial stability from systemic risk; third, to reduce national security risks; fourth, promoting US leadership and economic competitiveness; fifth, to promote fair access to secure and affordable financial services; and, finally, to support responsible technological developments that take into account important design considerations such as the environment. The Treasury Department will collaborate with White House officials and other departments over the next six months to provide key considerations and advice on the economy. The Treasury will collaborate with colleagues in the White House and other departments over the next six months to deliver key reports and recommendations regarding these goals.
Consumer protection is paramount
Although cryptocurrencies are new and come with new possibilities, Yellen says they should be treated the same as services like them, the important thing is underneath them It’s not the underlying technology, it’s the service they offer. It also emphasizes the protection of consumers, investors and businesses, while underlining the need to protect the funds of exchange customers. Yellen’s emphasis on supporting good and innovative crypto projects rather than crashing them has helped the crypto community and regulators agree on crypto regulations that will help boost the growth of the cryptocurrency market. Yellen also stated that wherever possible, crypto laws should be “technology-neutral”:
For example, consumers, investors and businesses should be protected from fraud and misrepresentation, regardless of whether assets are stored on a balance sheet or ledger; Similarly, firms that hold customer assets should be required to ensure that these assets are not lost, stolen, or used without the customer’s consent. As
Kriptokoin.com, regarding CBDCs that have been on the regulatory agenda for a while, Yellen’s statements:
I have not seen the results yet, but a We need to be clear that issuing a CBDC will be a major design and technical task and will take years, not months, to complete. In conclusion, I share the President’s desire to advance work on the challenges and possibilities a CBDC may present to American interests.
Bitcoin is trading at $43,400 at the time of writing. It continued its downward trend during the hours of the speech.
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