- Janet Yellen advocates for tighter regulations on cryptocurrencies.
- She attributes the need for stricter measures to the volatility in crypto prices and other vulnerabilities.
- Yellen specifically references FTX as an example to underscore her point.
- The Treasury Secretary emphasizes the importance of addressing risks associated with cryptocurrencies through regulatory means.
- Yellen's stance reflects growing concerns within the government regarding the crypto market's impact on financial stability.
Alongside Gary Gensler, Janet Yellen has pivoted from her previous anti-crypto stance to advocate for tighter regulations within the industry. Speaking before the U.S. House Committee on Financial Services, Yellen expressed concerns regarding the vulnerability and price volatility inherent in crypto assets. As a representative of the US Treasury, she highlighted the failure of crypto companies to adhere to traditional regulations, underscoring the need for new legislation.
However, Yellen's call for stricter laws extends beyond the immediate concerns within the crypto markets. The precarious state of the US economy, characterized by high debt and inflation, presents a pressing risk of currency abandonment. With the national debt surpassing GDP and reaching $34 trillion, fears of economic instability akin to the stagflation of the 1970s loom large. Any disruption, such as a bank run or a shift in sentiment favoring crypto, could erode the dominance of the US Dollar.
Yellen's stance is further influenced by past events, notably the collapse of FTX, which incurred $8 billion in losses due to non-compliance. This incident spurred Yellen to advocate for stringent regulations to prevent similar catastrophes in the future. Moreover, Yellen acknowledges the futility of outright bans on cryptocurrencies, as evidenced by China's persistent crypto transactions despite regulatory crackdowns. Hence, she has consistently pushed for a unified global approach to crypto regulation, echoing sentiments expressed at the G20 Meet in India in 2023.
It's important to note that while Voice of Crypto aims to provide accurate information, readers are encouraged to conduct their own research and exercise caution due to the volatile nature of cryptocurrencies.
