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New official takes office! Incoming Treasury Secretary Yellen: Will use all tools to address China trade practices, continue to monitor illegal financing applications of cryptocurrencies

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New official takes office! Incoming Treasury Secretary Yellen: Will use all tools to address China trade practices, continue to monitor illegal financing applications of cryptocurrencies

Former Federal Reserve Chair and incoming U.S. Treasury Secretary Janet Yellen attended a Senate confirmation hearing on Tuesday, 1/19. In addition to discussing her policy vision, she also mentioned the need to pay special attention to the role of cryptocurrencies in illicit financing.

No Longer Pursuing a "Weak Dollar"

It is well known that during the Trump era, the emphasis was on ending the strong dollar. He believed that this led to a huge trade deficit between the United States and other countries, causing major companies to lose their competitive edge. Although Trump briefly switched to supporting a strong dollar in mid-2020, the continuous devaluation of the dollar persisted due to the Federal Reserve printing money extensively to combat the pandemic.

According to a report by the Wall Street Journal, Yellen, at a virtual hearing hosted by the U.S. Senate Finance Committee, stated that in addition to using all means to combat China's trade practices, she will also pursue stable exchange rates and allow the market to determine the exchange rate. She emphasized that the U.S. will not seek international competitive advantages through the devaluation of the dollar.

She also called for "bold action" to rescue the economic market, increase spending to address the COVID-19 pandemic, and pointed out that the benefits of returning the economy to normal far outweigh the risks of increasing debt.

Cryptocurrencies Used for Illegal Financing

When Yellen was questioned by Democratic Senator Maggie Hassan about combating terrorism financing, she believed that this is an issue that will evolve with technological iterations and requires increasing attention. She stated:

Cryptocurrencies are a particularly concerning issue. I believe many transactions are primarily used for illegal financing. We need to ensure that fundraising methods that evolve with technology prevent illegal money laundering activities through these channels.

Familiarity with the Crypto Community

In fact, when Yellen served as the Chair of the Federal Reserve, she had previously expressed her views on Bitcoin. As early as 2014, she stated that "the Federal Reserve has no authority to regulate Bitcoin" and reiterated this point in December 2017, while also considering Bitcoin to be a highly speculative asset with no stable value.

However, Yellen is no stranger to the crypto community. In July 2017, while attending a congressional hearing, a mysterious man held up a sign behind her saying "Buy Bitcoin," which gained popularity. The mysterious man was later referred to as "Bitcoin Sign Guy" by the community and received nearly $16,000 in donations.

Overall, although the cryptocurrency market seemed to decline after Yellen's remarks, her stance is actually in line with current Treasury Secretary Steven Mnuchin. Mnuchin publicly stated in 2019:

Cryptocurrencies have provided up to billions of dollars for illegal activities and have involved national security issues.

Despite the positive news of many institutions entering the Bitcoin market, there have also been negative regulatory messages. For example, the President of the European Central Bank also believes that Bitcoin is widely used for illegal money laundering activities and should be subject to global regulation.