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US Treasury Secretary Janet Yellen acknowledges the benefits of cryptocurrencies

US Treasury Secretary Janet Yellen has made positive statements regarding cryptocurrencies after having made many critical remarks in the past.

During an interview with CNBC on March 25, Janet Yellen admitted that “cryptocurrency has clearly grown by leaps and bounds.” When asked if she has reduced her skepticism towards cryptocurrencies compared to the past, Yellen admitted that there are “benefits from crypto.” She also said that the Treasury “recognizes that innovation in the payments system can be a healthy thing.”

While she doesn’t think the use of cryptocurrencies in payments has increased significantly, cryptocurrencies are now part of many American investment strategies.

However, Janet Yellen still has “a bit of skepticism” about the improper use of cryptocurrencies. There are still valid concerns and risks around financial stability, consumer and investor protection, and illicit transactions, she said. And the Treasury wants to make recommendations that create a regulatory environment for cryptocurrencies while encouraging responsible development and innovation.

Yellen also mentioned that the Biden administration recently issued an executive order ordering the Treasury and other agencies to work on new crypto regulations.

The Finance Minister has historically been very critical of cryptocurrencies. In January 2021, Yellen suggested that cryptocurrencies are “used primarily for illicit financing.”

In February 2021, she decried Bitcoin as “extremely inefficient” in financial transactions, highlighting the energy involved in Bitcoin mining. She also claims it is an “extremely volatile” and “highly speculative” investment.

Earlier, in 2018, Yellen said in a fintech forum that she was “not a fan” of Bitcoin for the same reasons.

Despite the claims, analytics firm Chainalysis shows that each year from 2017 to 2021, only 0.15%-3.4% of crypto transactions involve illicit financing.