In her first speech on cryptocurrencies, Treasury Secretary Janet Yellen focused on the need to manage risk and prevent financial crimes with this new class of digital asset.
With the rise of cryptocurrencies, and, its largest adoption worldwide, the Secretary of the United States Department of the Treasury, Janet Yellen, specified the urgent need of the country to adapt their regulations and laws to regulate the crypto industry, in order to prevent financial crimes and manage the risk that these digital assets pose to financial stability.
Mitigating tax evasion and ensuring the safe custody of crypto assets were key points in his speech, the first one dedicated in depth to cryptocurrencies.
Yellen, in a slightly more industry-friendly tone, said that proper regulation will ensure the safety of investors and consumers, while allowing for the responsible development of innovation.
“The growth of digital services has opened up a new world of possibilities and risks, and policy around digital assets must evolve to take advantage of these new opportunities.”, Yellen said.
Based on these comments, the use of cryptocurrencies could become more widespread in the United States, if greater oversight is exercised to minimize the possibility of illicit activities.
Yellen gave her speech from the University of Washington, the first time she has devoted an entire address to addressing the regulatory situation of cryptocurrencies in the country. This speech comes just days after she stated that cryptocurrencies can bring benefits to their users and that the underlying technologies of this innovation can help develop and optimize the current payment system.
It may interest you: What do Janet Yellen's comments mean for cryptocurrencies?
Greater supervision of cryptocurrencies in the United States
The current Treasury Secretary focused on aligning current laws and regulations with the cryptocurrency industry. Yellen said that as banks and financial institutions enter the industry, there must be a regulatory framework that appropriately reflects and manages the risks.
The United States must evolve and strengthen its existing regulations and laws to cope with increased adoption of cryptocurrencies. This will also allow the country to promote its leadership and economic competitiveness in the crypto industry, while providing citizens with access to safer and more affordable financial services, Yellen said.
Recently, Vantage Bank implement NYDIG’s solutions to allow its employees to cash part of their paychecks in Bitcoin. Likewise, large financial institutions, such as Goldman Sachs and Morgan Stanley, also offer products and services related to crypto assets, which increases the exposure of American investors to this new class of digital assets.
Although Yellen still considers cryptocurrencies to be a risk and maintains a somewhat skeptical position towards them, she indicated that the general interest in the country is to close the current gap between the financial system and cryptocurrencies, supporting and promoting innovation, both financial and technological, in a responsible manner.
Joe Biden's executive order to regulate cryptocurrencies
Last March, US President Joe Biden signed an executive order tasking his government agencies with crypto regulation.
Within this context, Yellen assured that the Treasury will work with the White House and other regulators to address possible ways to regulate cryptocurrencies in the country. She said that they will continue to evaluate the pros and cons of the industry and that in the coming months they will present regulatory policy recommendations, in addition to the evaluation of possible regulatory actions and the necessary legislative changes in current laws.
On taxes, Yellen noted that taxpayers should receive the same type of tax return on digital asset transactions that they receive for stock and bond transactions, so they have the information they need to report their income to the IRS.
Russia does not use cryptocurrencies to evade sanctions
Until now, the Treasury believed that cryptocurrencies could be widely used in sanctions evasion. However, Yellen said in a hearing before the US House of Representatives Financial Services Committee that there is no evidence that sanctioned individuals or entities are using crypto assets in a significant way to circumvent the sanctions imposed.
In fact, the Treasury Secretary said that the Department has found no evidence that Russia is using cryptocurrencies extensively, which was one of the biggest concerns of US regulators. At the beginning of March, Senator Elizabeth Warren presented a bill calling for monitoring that Russia does not rely on crypto assets to evade sanctions.
Continue reading: US pushes for cryptocurrency regulation as it evaluates digital dollar
