US Treasury Secretary Janet Yellen has spoken out on digital assets for the first time since Joe Biden signed an executive order paving the way for a digital dollar. On the sound program speech April 7 at the American University of Washington: regulation and protection of market players.
Janet Yellen pleads for legal regulation of digital assets
The decree signed in early March by the American president was very favorably received by the cryptocurrency sector. The prudent text simply provides for a report within six months from the Treasury Department on “the future of money”. It must extend work already undertaken by the Federal Reserve of the United States (FED).
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Joe Biden’s executive order also opened the door to the creation of a Central Bank Digital Currency (MNBC), a digital dollar. Signs perceived positively by the actors concerned.
The word of Janet Yellen, expected on the subject, is a natural part of the continuity of the administration to which she belongs. Above all, she called for regulation of the sector, “ As banks and other traditional financial firms become more involved in digital asset markets, regulatory frameworks will need to appropriately reflect the risks of these new activities.”.
She placed the protection of consumers, investors and businesses at the center of her speech, “ against fraud and theft, privacy and data breaches, as well as unfair and abusive practices” she said. According to a recent survey, 16% of American adults, 40 million people, have had cryptocurrencies in their hands.
On the question of a possible future digital dollar, Janet Yellen chose the path of caution. She recalled that the process launched by the decree of March 9 would take time, “ I can’t tell you yet what conclusions we’ll draw, but we need to be clear that issuing an MNBC would likely be a major design and engineering challenge that would require years of development, and no months”.
The cryptocurrency sector plays its part
The dollar remains the international reserve currency. This is a very central issue for US authorities when developing a digital dollar. Meanwhile, in Washington, worried eyes are on e-CNY, the Chinese-developed MNBC, recently introduced to the WeChat app and its billion users.
In parallel, the wall street journal reports that the Biden administration is pushing the US Congress to adapt legislation to regulate stablecoins. These cryptocurrencies, backed by traditional currencies, are most often associated with the dollar, hence the urgency of the situation.
For its part, the cryptocurrency industry is hiring former top Democratic and Republican officials with a vengeance to weigh in on upcoming regulations on digital assets. Open to the principle of a legal framework for their sector, they hope to obtain legislation that is favorable to them.