So, Joe Biden is the U.S. President. He has held that post for two months now, and anyone who still has a problem with that might want to check how the electoral process works once more. Biden's administration has been moving quickly to address a wide array of economic and social issues, with the President focused on providing a more equitable and prosperous country.
While there are debates over what Biden's administration will bring and how its policies have fared, many in the crypto industry have been looking into how well it will do for the space. The Trump administration made several promises to provide some semblance of crypto regulations, but hardly did we see any progress on that front. Now, with Biden in charge, many believe that things could begin to turn around.
Work on COVID-19 for Now, but We See the Crypto Signs
With the new regime still in its first 100 days, it is clear that Biden is focused on economic recovery. The coronavirus struck a significant blow to the American economy last year, with businesses closing down and people losing their jobs. Biden has hoped to ease things, and he is getting off to a great start with the provision of a new stimulus package earlier this month.
While he has his hands full with the economic recovery mission, it is also worth noting that the Biden administration hasn't filled every cabinet pick. His nominee for Attorney-General, Merrick Garland, just got approval from Congress to ascend to the position, and several other top cabinet positions remain vacant. This is pretty normal for any administration.
However, when it comes to crypto-related policies, Biden has everything he needs to offer proposals out of the gate. His Treasury Secretary, Janet Yellen, has been approved by the Senate since January, and she seems to be pretty aware of cryptocurrencies.
So, with Yellen set to play a significant role in Biden's crypto-related plan, it is worth noting what she thinks about digital assets in general.
Yellen Shifts Her Stances
Yellen's confirmation process provided some thought about the policymaker and what she relieved was the state of digital assets in the world. On January 19, she addressed the U.S. Senate Finance Committee at a hearing. Answering Sen. Magie Hassan (D-NH) about her take on emerging technologies and their links to criminal organizations, she said:
"We need to make sure that our methods for dealing with these matters — with terrorist financing — change along with changing technology. Cryptocurrencies are a particular concern. I think many are used at least in a transaction sense 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."
The comment immediately sent waves across the crypto industry. It showed that while Yellen understands the transformative nature of cryptocurrencies, she also knows that they can easily be abused and channeled in the wrong ways.
While many took this as a warning shot, Yellen also complemented digital assets days later. In a letter to the Senate Finance Committee, the policymaker explained her goal to push for legitimate cryptocurrency use across the board.
"I think it important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system."
Yellen added her wish for the United States to be a leader in financial technology and digital asset innovation. She also emphasized her objective to build an enabling regulatory framework for digital assets in collaboration with the Federal Reserve.
Criminal Applications Take Center Stage
Sadly, Yellen appears to be more focused on criminal crypto use, as she has highlighted this point since she took office. At a financial sector innovation roundtable last month, she explained that cryptocurrency misuse is becoming more of a problem in the United States. Ranking this with issues like digital security and cyber attacks, the policymaker explained the need to combat this challenge expeditiously.
Yellen pointed out that she understands the promise that cryptocurrencies bring. However, she also isn't oblivious to their risks. Despite the progress made in curtailing digital asset abuse, she highlighted a need for more work and more significant security and tracking improvements.
The policymaker also appeared at a New York Times Dealbook conference, where she told CNBC's Andrew Ross Sorkin that she didn't overly believe in Bitcoin's effectiveness at facilitating transactions. There, Yellen explained that Bitcoin has undoubtedly grown in prominence over the past few years. However, she still didn't see it as an efficient mechanism for transaction processing.
Not Done Yet
Understandably, these stances will concern any crypto insider. Yellen is set to play a significant role in crypto regulations, and negative comments could be a precursor for what her policy proposals could be.
Still, there have been some positives nonetheless. As she told Sorkin, she believes that central bank digital currencies (CBDC) have a role to play in the global financial future, and she wouldn't be against developing one. Such a move will put the United States on par with China and other countries embarking on such endeavors.
Other people have acknowledged Yellen's pro-crypto stance, too. Sen. Cynthia Lummis (R-Wo), a pro-crypto Congresswoman and a member of the Banking Committee, has explained that Yellen is open-minded about cryptocurrencies. In a podcast episode with Anthony Pompliano, Lummis explained that she had spoke with Yellen about crypto regulations and that the policymaker looks interested in the topic.
While the troubling signs might appear more prominent for now, there's always room for improvement. For now, crypto industry insiders hope to wait and see.