U.S. Treasury Secretary Janet Yellen has increasingly warmed to cryptocurrency's use cases and even highlighted the benefits of crypto by claiming digital assets have recently "grown by leaps and bounds" in technological advancement.
"I have a little bit of skepticism because I think there are valid concerns about it," Yellen told CNBC in a recent interview. "Some have to do with financial stability, consumer/investor protection, use for illicit transactions and other things. On the other hand, there are benefits from crypto, and we recognize that innovation in the payment system can be a healthy thing.”
"Crypto has obviously grown by leaps and bounds," she said, pointing out that it was no longer just a short-term craze. "And it's now playing a significant role—not really so much in transactions, but in investment decisions of lots of Americans."
In 2018, Yellen infamously claimed she was "not a fan" of Bitcoin, highlighting the illicit transactions and crime associated with cryptocurrency.
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At a February 2021 U.S. Financial Sector Innovation Policy Roundtable, she said: “I see the promise of these new technologies, but I also see the reality,” pinpointing myriad problems ranging from terror financing and drug trafficking to money laundering.
In early March, the White House unveiled a long-awaited crypto executive order mobilizing different government departments to research cryptocurrency's benefits and risks. In response to the order, Yellen said that cryptocurrency might yield “substantial benefits for the nation, consumers, and businesses.”
“The Treasury will work to promote a fairer, more inclusive, and more efficient financial system, while building on our ongoing work to counter illicit finance, and prevent risks to financial stability and national security,” Yellen said.
“It will also address risks related to illicit finance, protecting consumers and investors, and preventing threats to the financial system and broader economy,” she added.