The dawn of a new presidential administration offers every company and industry opportunities to chart a course forward. Candidates have their views on a myriad of topics, and these views do end up affecting different sectors in diverse ways.
In the next few weeks, Joseph R. Biden (Joe Biden) will take office as the president of the United States. It is worth noting what this could mean for the crypto industry.
His entry is set to bring in sweeping changes to policies, from tax nomenclatures and foreign policy to immigration and possibly climate change. However, what could a Biden presidency mean for the crypto space?
To be fair, neither Biden nor any of his team members have spoken explicitly about plans for the crypto industry. The President-Elect has been sharing his top cabinet picks already, and those with direct ties over the crypto industry still haven't said anything about it.
Janet Yellen: The Next Secretary of the Treasury
The Wall Street Journal reported about a month ago that the Biden administration would nominate Janet Yellen as the new Treasury Secretary. Yellen served as the Federal Reserve's Chairperson under the Obama and Trump administrations, from 204 to 2018. She will replace Steve Mnuchin, a former banker at Goldman Sachs, who served under outgoing President Donald Trump.
In Mnuchin's time, little was done about crypto regulations. In February, the current Treasury Secretary said that the Financial Crimes Enforcement Network (FinCEN) would provide effective legislation to cover the crypto space.
At the time, Mnuchin spoke to Congress at the $4.8 trillion budget proposal from the Trump administration for 2020. In his speech, the Treasury Secretary pointed out that the budget will address crypto monitoring and enforcement against possible criminals.
In part, Mnuchin said:
"We're about to roll out some significant new requirements at FinCEN [Financial Crimes Enforcement Network]. We want to make sure that technology moves forward, but on the other hand, we want to make sure that cryptocurrencies aren't used for the equivalent of old Swiss secret number bank accounts."
Mnuchin added that the Treasury Department would collaborate with agencies like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) on the initiative. Still, nothing had materialized from that end. There is little to no chance that any legislation will emerge before the curtain closes on the Trump administration.
Yellen now has an opportunity to thrive where Mnuchin failed. However, she doesn't seem to be much of a crypto fan either.
In 2018, Yellen spoke at the Canada FinTech Forum, where she outlined her concerns with Bitcoin and the prospect of Central Bank Digital Currencies (CBDCs). The former Federal Reserve Chair primarily focused on issues like investor risks, price volatility, and security threats.
A video posted by Francois Pouliot showed her saying:
"I will just say outright I am not a fan, and let me tell you why… I think first of all, very few transactions are actually handled by Bitcoin, and many of those do take place on Bitcoin are illegal, illicit transactions."
Yellen has also previously described Bitcoin as a speculative asset. While she highlighted that the asset could work as a currency, she also pointed out that it will need to be stable. To her, this lack of stability will affect Bitcoin's status as a store of value and a means of making payments.
Industry Skeptics Happy About Yellen
While these comments don't necessarily show that Yellen will be an anti-crypto force, they don't exactly make a case for her either. Some have also pointed out that the has the propensity to impose stringent regulations on the industry.
Last month, Nouriel Roubini, prominent economics and a professor at NYU’s Stern School of Business, explained that Yellen and Biden would crack down on the crypto space. Roubini is one of the most notable crypto detractors, and he has always taken the time to bash digital assets whenever he can.
In a Twitter debate with lawyer Jake Chervinsky, Roubini discussed a recent proposal from lawmakers to impose on-chain Know-Your-Customer (AML/KYC) and Anti-Money Laundering (AML) regulations on stablecoin payments. Chervinsky explained that the proposal had no chance of making it past Congress, but Roubini was instead convinced that it was only a precursor of things to come.
Noting that he worked with Yellen on the Council of Economic Advisers (CEA), Roubini explained that the incoming Treasury Secretary would be brutal on the "criminal" crypto industry. He pointed out that while Mnuchin was no crypto fan, Yellen will match her distaste for digital assets with action.
The Vacant SEC Chairman Role
Along with Yellen, there is also a possible role that could determine the Biden administration's crypto views. That will be the next Chairman of the SEC. In November, Jay Clayton, who served as the Chairperson for three years, announced that he would step down from his role at the SEC. Clayton has been one of the SEC's longest-serving Chairmen, and he will leave a reputation for being particularly hard on the crypto space.
The Clayton-led SEC stifled innovation on several fronts. It failed to act on progressive crypto regulation, halted several interesting crypto tokens' launches, and prevented companies from launching crypto-based financial products like exchange-traded funds (ETFs).
Companies were also somewhat scared that the agency would hit out at them if they invested in or launched Initial Coin Offerings (ICO). The Biden administration is yet to announce a permanent pick, but its choice will go a long way in spelling out its view of the crypto industry in the future.