Clarifying Janet Yellen’s Comment On Digital Assets

Clarifying Janet Yellen’s Comment On Digital Assets

• Janet Yellen clears the air on her previous remarks on Bitcoin in a written testimony submitted to the Senate.
• In her January 19th Senate confirmation hearing, Janet Yellen noted that cryptocurrencies are used to facilitate crime, including terrorist activity.
• Following her statements, she faced immense criticisms from Bitcoin supporters, and the media’s coverage of the matter didn’t help her cause.
• Janet Yellen had previously chaired the Federal Reserve Board, so she has considerable experience for the new role she sought to occupy.

Janet Yellen has not always been the biggest supporter of Bitcoin since the invention of the cryptocurrency, which has spawned a hundred others like it.

During her Senate confirmation hearing in January, she referred to the cryptocurrencies as of particular concern since they have a high propensity of being used to aid criminal activity, including terrorist activity.

However, in written testimony to the Senate, she sought to clarify her earlier comments saying that digital currency like Bitcoin has great potential of improving the financial system.

Janet Yellen Clears The Air

In her Senate Committee hearing in January, Janet Yellen quizzed by Democratic Senator Maggie Hassan; she made statements that sparked an uproar online.

Senator Hassan asked the 78-year-old experienced Yellen, “Can you outline some of these emerging technological concerns and how Treasury should combat new forms of terrorism criminal financing?” Yellen replied:

Cryptocurrencies are a particular concern. I think many are mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn't occur through those channels.

Her one-sided response painted cryptocurrencies in a negative light as critics derided her statements as untrue. A possible explanation could be that the time allotted for her to answer the question was too little, and she could not properly expatiate on the reply.

The opportunity to file a written test gave her ample opportunity to clear the air on her previously polarized view.

When asked about her opinion on the potential threats and benefit of cryptos to the economy, she said, “I think it is important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system.”

She explained that:

At the same time, we know they can be used to finance terrorism, facilitate money laundering, and support malign activities that threaten U.S. national security interests and the integrity of the U.S. and international financial systems.

Yellen said that if confirmed, she will work with the Federal Reserve Board and other regulatory agencies to come up with a blueprint for these regulatory agencies. Her written testimony softens her perceived hardened stance on cryptocurrencies.

On the Flipside

• Economist, Nouriel Roubini, says Bitcoin is not a hedge against inflation, and investors are ‘feeding the bubble.’
• Nouriel Roubini is popularly known as “Dr. Doom” for his bearish views on cryptocurrencies
• Bitcoin Critic, Peter Schiff, has also fired shots at Elon Musk for hyping Dogecoin for his personal benefits.

Janet Yellen, A Round Peg in A Round Hole?

Janet Yellen, aged 74, is the 84th United States Secretary of The Treasury. Previously, she served as a member of the Federal Reserve Board of Governors between 2010 to 2018 and a one-time President of San Francisco Federal Reserve Bank.

There have been calls concerning her stance on cryptocurrencies, repeatedly referring to Bitcoin as a bubble and a financial anomaly.

It is hoped that she will stick to the script in her written testimony submitted to the Senate to discharge her duties as the US Secretary of the Treasury.

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