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Friday, March 5, 2021

Janet Yellen, The Nominee For Treasury, Has Been Looking To Reduce Cryptocurrency Use

The very tenets of cryptocurrency would come under strict scrutiny if Janet Yellen, the Treasury nominee gets the post in the coming week. In a Tuesday meeting regarding the confirmation hearing at the Senate Finance Committee, Yellen spoke about the problems with cryptocurrency, when asked by Sen. Maggie Hassan. Janet Yellen spoke about how cryptocurrencies have turned out to be quite a big concern for the Treasury department. She believes that this digital currency is being used for illegal and illicit financing in its transactional nature. 

What Are Janet Yellen’s Fears Regarding Cryptocurrency?

Yellen also spoke about how she would like to examine the different ways through which cryptocurrencies would be regulated, and their use curtailed. According to Janet Yellen, this would prevent money laundering in various channels. In certain ways, Yellen is not wrong. Financial networks that use Blockchain are quite attractive for people with nefarious purposes as they don’t need identification.

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This is quite different from most conventional forms of markets. Since specific organizations or individuals are in charge of taking care of these networks, there is no way for the government to supervise everything that’s going on. Also, it would be quite difficult for the government to expect things to happen as they want it to be. 

The best way to deal with this issue, and this is something Yellen points at, is to focus on the regulatory aspect of bitcoin. And this specifically highlights the exchanges taking place between users. When the administration is able to determine the identity of who received a bitcoin payment, they soon start tracing multiple payments through the same ledger of the blockchain network. 

There were several rules imposed by the Trump administration on tightening the money-laundering nature of cryptocurrency. Janet Yellen, if appointed, would definitely not scrap these rules away. Rather, the major trope seems to be the addition of newer rules that would severely curtail the use of cryptocurrency. 

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