Janet Yellen did not only turn the heads of sceptics by being elected as the first female Treasury Secretary of the United States in 2021, but her controversial remarks about the ongoing cryptocurrency mania also earned her some irksome glances. During the senate confirmation speech, she introduced a strong yet antagonistic stance for the digital asset markets. In her opinion, the DeFi markets are creating a huge concern for terrorist financing and money laundering.
It should be noted that cryptocurrencies are mostly prevalent in the western hemisphere of the world for the time being. Most Asian countries have either banned or restricted the transition of cryptocurrencies. Meanwhile, the White House Press Secretary, Jen Psaki, told the media in the latest press briefing that US president Joe Biden agrees with Janet Yellen’s stance on digital assets.
Is the new US Administration Looking to Regulate Digital Assets?
For now, a huge number of financial institutions present in the United States have already started to pour their funds into Bitcoin and other digital currencies. A ban at this point would result in a loss worth trillions of dollars. A stricter regulation seems to be impractical considering the decentralized nature of the blockchains. However, it would still cause a market crash in billions.
The SEC is already facing difficulties and lash back for putting a semi-decentralized blockchain company, Ripple Labs, under scrutiny. Many are speculating that there are no defendant nominees for putting Bitcoin on trial, and it is impossible to put a stop to BTC investment due to its presence on the internet. Janet Yellen herself has recognized the potential of digital assets to provide a faster and cost-effective store of value.
Will the US Government Issue a Centralized Digital Dollar?
The perspective of Janet Yellen on regulating cryptocurrencies contemplates a broad spectrum. The Treasury Secretary is not a big fan of independent blockchains that are managed by the participation of remote stakeholders. However, she encourages the idea of investing the federal reserves into launching a digital dollar. China has already introduced the digital Yuan and is taking measures to make it available to the people on a large scale.
Biden seems to be on board with the ideas presented by Yellen. Yellen has also been sceptical about the massive carbon footprint due to the decentralized mining process and the proof of work consensus algorithm. Provided the current state of the economy, it is highly unlikely that the government tries to regulate or ban the digital asset markets. However, it is possible to spot a new centralized contender in the form of a digital dollar.