The U.S. Senate has confirmed Janet Yellen as Treasury Secretary by a vote of 84-15, indicating wide bipartisan support for the first woman to hold the top job at the Department of the Treasury.
What that means for the blockchain and cryptocurrency industry remains to be seen—and probably will for a while as Yellen will have her plate full with issues like President Joe Biden’s $1.9 trillion stimulus package, which is getting a hostile reception from Republicans.
Last week, Yellen calmed some fears that arose after she said in her Jan. 21 testimony before the Senate Finance Committee that she wanted to “curtail” the “malign activities” that for which digital assets have been used.
Yet in her written response to that committee’s questions, Yellen said she planned to “work closely” with U.S. banking and securities regulators to “implement an effective regulatory framework,” for cryptocurrencies.
“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 wrote.
She added that she plans to “work closely” with U.S. banking and securities regulators to “implement an effective regulatory framework,” for cryptocurrencies.
That bodes well in the U.S., where President Biden appears set to put three regulators with strong cryptocurrency backgrounds at the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Office of the Comptroller of the Currency (OCC).
What Yellen’s confirmation will mean for cryptocurrencies on the global stage is another question, Mati Greenspan, founder of Quantum Economics, told Modern Consensus before the Senate vote. He said:
“If she were to collaborate with international regulators as Treasury Secretary it could potentially have very harsh consequences for all of crypto.”
He pointed specifically to European Central Bank President Christine Lagarde.
On Jan. 13, Lagarde called for greater global regulation of cryptocurrencies, commenting that Bitcoin is a “highly speculative asset” used for some “totally reprehensible money laundering activity.”
She has been a strong proponent of a digital euro, saying the EU should be working faster on a central bank digital currency, but also warning of the “emerging threat posed by crypto-assets” during her time as head of the International Monetary Fund.
“Lagarde has already demonstrated her willingness” to make things very difficult for cryptocurrency, Greenspan added.
That’s a very different perspective than he had when Lagarde took up the ECB position in July 2019, just as the storm over Facebook’s Libra stablecoin—since renamed Diem—had broken.
“I think she’d be a good figurehead and role model to lead the European side of oversight,” of Libra, Greenspan predicted at the time.
Eighteen months later, Lagarde’s tenure at the ECB has changed his mind.
However, what influence she’ll have on Yellen’s thinking also remains to be seen.