Janet Yellen, the secretary for U.S. Treasury, on the 7th of April in Washington DC, gave her first remark on cryptocurrency and to the delight of investors, it was on neutral ground.
The former Federal Reserve Chairwoman expressed her opinion on the cryptocurrency regulation framework saying that it should be focused on protecting investors and mitigating trade risks. Contradicting the views of other fellow government officials like the SEC chairman, who took delight in castigating cryptocurrency, Ms. Yellen rather chose a neutral ground on the matter as she emphasized that more attention should be placed on better management of the risk involved in crypto trading as a result of its high volatility.
In her speech, she said that the vast growth in digital technology has opened doors of possibilities coupled with risks to the world, something that would have been deemed not feasible many years back. She solicited for innovations that showcase neutral technologies, and also maintained her stance that the general framework should not focus on certain technologies but rather on risks. She continued that the government should be more concerned about how to regulate innovation such that it would add to the global economic growth and competitiveness and also protect the security of the U.S. and the world at large.
Don’t Expect The CBDC Anytime Soon
Janet Yellen is one of the officials tasked with the issuing of the central bank digital currencies which is yet to come to the limelight. She said that the regulators are still trying to figure out how the proposed CBDC would affect national security, consumers’ utility, monetary policy, and international trade. In addition, she made it clear that issuing a CBDC is not going to happen anytime soon as it requires a lot of design and engineering efforts that will take years to complete.
The ex-Federal Reserve Chairwoman affirmed her awareness of the inefficiency and poor speed of the traditional mode of payment as it takes an average American too long to complete a transaction using the traditional system. She however concluded that people need a faster and more efficient mean of transacting and with the CBCD not available yet, then there is an urgent need to formulate a crypto regulation framework that will help minimize the risks involved as well as to save America from being trapped with old payment system for years to come.
Ms. Yellen Comments On Stablecoins
The secretary commented on Stablecoins which recently reached a combined market cap of $186 billion. She said that it stirred the concerns of numerous policies like user protection, illicit finance and systematic risk, etc. she continued that most stablecoin issuers claims to have their coins backed up by fiat currencies and anytime users want to exchange their coins for dollars, the firm can execute the request because it has the money required. She then concluded that at the moment, the case may vary as no one can guarantee you that anymore.
Conclusively, it is correct to say that the situation on the crypto regulation framework is still the same as before, however, it seems the U.S. are taking their time before making any move.