Janet Yellen, who is expected to lead the Treasury Department for Biden Administration, described cryptocurrencies as a “particular concern” when it comes to terrorist financing.
Yellen said that during her Senate confirmation hearing in response to a question from Sen. Maggie Hassan (D-NH) who asked about “the potential for terrorists and criminals to use cryptocurrencies to finance their activities.”
“I think many [cryptocurrencies] are used, at least in a transaction sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels,” Yellen said Tuesday in remarks reported by Coindesk.
In her former post as Chair of the Federal Reserve, Janet Yellen has spoken dismissively of Bitcoin and added that she is “not a fan.” Her skepticism may arise in part from an incident famous in cryptocurrency circles that saw a man photo-bomb her at a meeting with a sign writing “Buy Bitcoin.”
Many in the crypto world claim Bitcoin (BTC) is a superior currency because it is not prone to government-induced inflation—a claim that gained new momentum after central banks started printing money at record rates in order to provide economic stimulus during the covid-19 pandemic. The stimulus resulted in a recent meme mocking the Fed called “Money printer go brrr.”
Cryptocurrencies don’t seem to be top order priority, however, for Janet Yellen, who is expected to be confirmed to her Treasury Secretary post in the short term. At Tuesday’s Senate hearing, she said her initial focus will be on helping American workers and businesses hit hard by the pandemic. She also took swipes at China for unfair trade and monetary policies.
While the crypto industry is likely to see Yellen’s latest remarks as a cause for concern, it is also optimistic that another Biden appointee—incoming SEC Commissioner Gary Gensler—will give them a potential champion in the federal government. Gensler, a former Goldman Sachs executive, has taught crypto courses at MIT.
As for Yellen, her statements come at a time when the federal government is proposing controversial new rules that impose additional customer reporting requirements on crypto businesses.
The U.S. crypto industry, which must already comply with a raft of anti-money laundering rules, has claimed the new rules are more onerous than those which are imposed on banks and that they will inhibit innovation. Crypto advocates have long said technologies such as Bitcoin are unfairly maligned, pointing out that crooks have long used currency such as $100 bills and Apple gift cards for criminal ends.
The fate of the proposed rules is unclear for now.