- Janet Yellen this Tuesday showed concern about cryptos such as Bitcoin, whose value has skyrocketed. She even hinted that lawmakers should “curtail” the usage of Bitcoin as a response to terrorism concerns.
- Yellen stated that crypto transactions are used “mostly for illegal financing.”
- It was the most recent signal that Washington could crackdown on Bitcoin and other coins like Ethereum.
Janet Yellen, President Biden’s nominee for treasury secretary, said that leaders should “curtail” the usage of cryptos like bitcoin over worries that they are “mostly” used for illicit activities.
There is a boom in public interest in bitcoin and its value has soared by around 300% in the previous year. Bitcoin was lower by 7.59%, down to $34,183.57, this Wednesday, while its competitor Ethereum was lower by 9.74%, down to a number of $1,259.97, after reaching an all-time high of over $1,430 this Tuesday.
Yellen’s words show that the incoming Biden team might be hostile toward cryptos and could possibly increase regulation. Regulators from multiple nations, like the EU Central Bank and the UK’s official financial regulator, have shown anxiety about assets like Bitcoin.
Senator Maggie Hassan interviewed Yellen during the confirmation hearing. She asked the nominee about the possibilities of terrorists using digital currencies.
“You’re absolutely correct that the technology to achieve this changes with time, and we must ensure our process for handling these matters, like terrorist financing, keep up with the changing technology,” Yellen responded.
“Cryptos are a special concern. I believe many are utilized – at least in a transaction way – mostly for illegal financing.
“And I believe we need to look at ways to curtail their usage and ensure that money laundering does not happen through those avenues.”
Yellen’s words were the same as those of ECB President Christine Lagarde, who stated previously that Bitcoin was being used for “very terrible money-funneling activity.”
Large investors have echoed similar anxiety. Warren Buffet remarked in 2020 that “Bitcoin has been used to move large amounts of money illegally.” He told investors to “go short suitcases,” as criminals no longer require them to carry their cash.
Digital currencies like Bitcoin have no physical form and are not controlled by a central authority like a bank. This leads to them being unregulated and somewhat untraceable, causing criminals to own them for their own purposes.
But crypto fans argue that not having central control makes them better in many ways. For one, they say that Bitcoin can shield against the destruction of currencies when banks push large stimulus programs.
Bitcoin bulls are very energized by the huge jump in the crypto’s value.
“The leader of crypto world is the base foundation for an emerging alt-financial system,” said the CTO at the popular digital exchange Bitfinex, Paolo Ardoino.
“Bitcoin is giving a solid backing for a surprising number of projects, some of these will completely alter the nature of money within ten years,” Ardoino argued. Bitcoin products include options and funds.
Regulators have asked for a careful approach. Previously, the Financial Conduct Authority of the UK claimed that investors who invest in cryptos like Ethereum and Bitcoin could “lose their entire portfolio.”