In the CNBC show ‘Closing Bell’, Treasury Secretary Janet Yellen, who was recently confirmed, said that Bitcoin regulation should focus on investor protection.
Yellen pointed to Bitcoin’s volatility, saying it has been so in recent years. She said that “regulatory institutions that trade in Bitcoin, to make sure that they fulfill their regulatory responsibilities, are definitely important.”
She also pointed to the need to ensure that Bitcoin is not used for ‘illegal transactions’.
The Yellen era
How the Treasury Department will proceed with the cryptocurrency is still unclear, given Yellen’s lack of details so far on the matter. As head of the Federal Reserve, she was generally good at crypto. However, as in the CNBC interview, she directly pointed to the use of Bitcoin in illegal transactions.
Yellen also called for better cooperation with other government agencies regarding crypto-regulation. A 114-page draft document on the department’s directions was sent to her during her Senate hearings. However, the concept gives little detail about this collaboration.
Digital dollars?
One area in which the treasury department will have to work together is in terms of a central bank’s digital currency (CBDC). However, a digital dollar is not a high priority for the Federal Reserve at the public level. As a former chairman of the Federal Reserve, Yellen showed little interest in creating a CBD. Current chairman Jerome Powell showed no more urgency and said earlier that “it is more important to get it right than to be first”.
SEC ratios
Yellen will have to come to an agreement with a security and exchange commission that will change direction. Yellen’s statement on closer cooperation resonates with the SEC’s own ‘Crypto Mom’, Commissioner Hester Pierce. In an interview on February 14, Pierce called for clarity and greater uniformity in Washington’s regulation of cryptocurrency.
The SEC is facing the dire consequences of a last-minute action by then-outgoing commissioner Jay Clayton, who has launched a lawsuit against Ripple and two of its executives for selling a total of $ 1.8 billion in unregistered securities.
Brad Garlinghouse, CEO of Ripple, maintains that the company already has a government ruling that it is not a security. In fact, Ripple’s XRP token is now licensed under the state of New York as a digital currency. However, the SEC has not ruled on XRP, so the hodge-podge of regulation could still leave Ripple in trouble.
Focus
In the CNBC interview, Secretary Yellen focused on the latest round of COVID economic stimulus. The economic impact of the pandemic will remain her priority, but issues of cryptocurrencies will certainly rise during her tenure.
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