What could Janet Yellen's departure for cryptocurrency mean?

What could Janet Yellen’s departure for cryptocurrency mean?

Janet Yellen previously advocated for crypto regulation and advised against bitcoin retirement plans – Image: Shutterstock

Janet Yellen, US Treasury Secretary, will leave office after the midterm elections, according to Axios.

While recognizing innovation, Yellen has taken a strong stance on the need for regulation in the crypto industry.

As the head of the US National Department of Finance, a new secretary could have a huge impact on the cryptocurrency industry.

Yellen’s previous history with encryption

Yellen has been labeled by some as having an anti-cryptocurrency stance and has a history of highlighting its risks and calling for regulation.

She advised against using cryptocurrencies, including Bitcoin (BTC), as a retirement plan at a New York Times event in Washington. according to BloombergShe said, “It is not something I would recommend to most people who are saving for their retirement. For me, this is a risky investment.”

BTC to USD

Yellen also emphasized the risks of cryptocurrencies following the collapse of the TerraForm Labs stablecoin and LUNA in May. she argue It was a growing threat that could “ultimately represent the same kind of risk we’ve known for centuries in terms of bank operations”.

On the other hand, the Treasury Secretary acknowledged the innovative technology of cryptocurrencies. But this is often obscured by the need for regulation. in Speech She told Cogod College of the American University Business Center for Innovation:

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“We must also bear in mind that ‘financial innovation’ in the past often did not benefit working families, and at times exacerbated inequality, giving rise to illicit financing risks, and increasing systemic financial risks.”

Stable coins ban algorithm

Recently, the House Committee on Financial Services drafted a crypto bill that would ban stable algorithms, such as terraUSD, according to Bloomberg

The bill would make it illegal to mint or create “internally guaranteed stablecoins” within the next two years.

The next Secretary of the Treasury could have a huge impact not only on this stablecoin base, but also on the broader crypto laws in the United States.

Who can replace Yellen?

The Axios The report named US Commerce Secretary Gina Raimondo and Federal Reserve Vice Chair Lyle Brainard as possible successors.

Raimondo has so far taken a rather positive approach to cryptocurrencies. in statement In March, following US President Joe Biden’s executive order on digital assets, I recognized the “deep effects” of cryptocurrencies. She said:

“Digital assets and associated technologies can hold great potential for individual economic empowerment, financial inclusion, and strengthening America’s position as a global leader in innovative financial services.”

The current commerce secretary has also raised challenges. Raimondo learned about threats, such as money laundering, “abusive activities,” and “other illicit financing.”

Meanwhile, Brainard Speech At the Bank of England conference in July, she raised concerns that the cryptocurrency ecosystem could become “too large or interconnected to pose risks to the stability of the broader financial system.”

But the process of electing a new Treasury secretary will not be easy for Biden, according to him Axios.

She said, “While [Yellen’s] A possible departure would give Biden a chance to respond to public concern about his handling of the economy, and it would also create an immediate political headache: finding a successor that the Senate could confirm.”

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