Treasury Secretary Janet Yellen Skeptical of Bitcoin

In a few of her first remarks with reference to digital belongings since Senate affirmation, Treasury Secretary Janet Yellen sounded an alarm on Bitcoin. Her views on the regulation of digital belongings extra broadly are positive to affect coverage within the coming years on the varied places of work and bureaus throughout the Treasury Division that oversee the asset class, together with the OCC, IRS, OFAC and FinCen.

In a latest interview with CNBC’s Andrew Ross Sorkin, Secretary Yellen expressed her view that, “I don’t assume that Bitcoin . . . is extensively used as a transaction mechanism.” She continued, “To the extent it’s used I worry it’s typically for illicit finance. It’s an especially inefficient method of conducting transactions, and the quantity of vitality that’s consumed in processing these transactions is staggering.” Secretary Yellen additionally famous that, “It’s a extremely speculative asset and . . . I feel folks must be conscious it may be extraordinarily risky. I do fear about potential losses that buyers can undergo.”

In response to questions for the record at her Senate affirmation listening to, Yellen was extra measured in her evaluation of digital belongings, stating:

“I feel it essential we take into account the advantages of cryptocurrencies and different digital belongings, and the potential they’ve to enhance the effectivity of the monetary system. On the similar time, we all know they can be utilized to finance terrorism, facilitate cash laundering, and help malign actions that threaten U.S. nationwide safety pursuits and the integrity of the U.S. and worldwide monetary methods. I feel we have to look intently at how you can encourage their use for reliable actions whereas curbing their use for malign and unlawful actions. If confirmed, I intend to work intently with the Federal Reserve Board and the opposite federal banking and securities regulators on how you can implement an efficient regulatory framework for these and different fintech improvements.”

Gary Gensler, the Administration’s nominee for SEC Chairman, faces a affirmation listening to on March 2, the place he’s additionally anticipated to area questions from senators about Bitcoin and different digital belongings.