From "I don't like Bitcoin" to "Crypto has benefits", reviewing the changes in the US Treasury Secretary's attitude towards crypto in the past 8 years

On the morning of March 25, Eastern Time, U.S. Treasury Secretary Janet Yellen shared her views on cryptocurrency in an interview with CNBC. She acknowledged that encryption has benefits and plays an increasingly important role in the U.S. financial industry, and said she would work hard to create a regulatory environment conducive to continued innovation.

In a recent interview, CNBC “Squawk Box” host Andrew Ross Sorkin asked Yellen where crypto is right now, and she responded:

“ Crypto is obviously growing by leaps and bounds, and it now plays a major role, not in trading, but in the investment decisions of many Americans. And the president just issued an executive order a few weeks ago asking us and other agencies to consider regulation of cryptocurrencies.”

The moderator then asked if this meant she was less skeptical of cryptocurrencies now than she had been in the past, to which Yellen responded:

“There’s a little bit of skepticism [because] I think there are legitimate concerns around it. Some have to do with financial stability, consumer investor protection, use for illicit transactions and other things. On the other hand, crypto also brings benefits, and we recognize that innovation in payment systems can be a healthy thing. We hope to ultimately make recommendations that create a regulatory environment where healthy innovation can take place .”

The former Federal Reserve Chairman (2014-2018) and current Treasury Secretary has long been skeptical of cryptocurrencies, publicly stating in 2018 that he "doesn't like" Bitcoin.

Over the past eight years, what subtle changes have taken place in Yellen's attitude towards cryptocurrency and blockchain technology? The following are some public comments compiled by the Bitpush editorial team:

• Speaking to the Senate Banking Committee in February 2014: "The Federal Reserve has no authority to monitor or regulate Bitcoin in any way."

• In response to a question from U.S. Congressman Mick Mulvaney in October 2015: "We do not believe that the popularity of Bitcoin is related to the public's view of the Federal Reserve's monetary policy behavior."

• Attending a House committee hearing in September 2016: "[Blockchain] could have very significant impacts on payment systems and business practices."

• In January 2017, he attended the Commonwealth Club, a US public affairs forum: "[Blockchain] is a very important new technology that may have an impact on the way transactions are processed throughout the entire financial system."

• December 2017 press release: “It [Bitcoin] is not a stable store of value and does not constitute legal tender. It is a highly speculative asset”; “The Federal Reserve does not actually play any role other than to ensure that the banking institutions that we regulate are mindful that they are appropriately managing any interactions that they have with participants in this market and are appropriately monitoring Bitcoin — their money laundering [and] Bank Secrecy Act responsibilities.”

• October 2018: “I’m going to be upfront and say that I’m not a fan of [Bitcoin], and let me tell you why. I know there are hundreds of cryptocurrencies out there, and maybe there will be something more fascinating that comes along, but I think first of all, there are very few transactions that are actually processed by Bitcoin, and many of those that are happening on Bitcoin are illegal transactions.”

On January 19, 2021, the U.S. Senate Finance Committee held a hearing to review Janet Yellen’s pre-nomination for Treasury Secretary.

In the response report on the nomination of the U.S. Treasury Secretary released on January 21, 2021, there is the following question: "What do you think are the potential threats and benefits of these innovations and technologies to U.S. national security? Do you think more needs to be done to ensure that we have appropriate safeguards and regulations in place for digital and cryptocurrencies?"

Yellen responded: “I think it is important that we consider the benefits of cryptocurrencies and other digital assets and their potential to improve the efficiency of the financial system. At the same time, we know that they can be used to finance terrorism, facilitate money laundering, and support malicious activity that threatens the national security interests of the United States and the integrity of the U.S. and international financial systems.”

“I believe we need to take a close look at how to encourage their use for legitimate activities while reducing their use for malicious and illegal activities. If confirmed, I intend to work closely with the Federal Reserve and other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations.”

Yellen's shift is also a reflection of the attitude of senior U.S. regulators toward encryption, which is to increase regulatory transparency without restricting innovation.

Bitpush previously reported that President Biden recently officially signed the first executive order on cryptocurrency, instructing the Treasury Department and other agencies to study the regulation of cryptocurrencies and digital assets, focusing on priorities such as financial stability, consumer and investor protection, and illegal activities.