Janet Yellen may be open to US regulators considering digital currency, but she seems deeply concerned about bitcoin.
In an interview with The New York Times today, The DealBook DC Policy Project, Yellen said it makes sense for the Federal Reserve to assess the digital dollar. Speaking to Andrew Ross Sorkin, the finance minister said that the digital dollar that the Fed had could lead to faster, safer and cheaper payments, but added that there are “many things” to consider before a potential rollout. She wonders how regulators will “deal with money laundering and illegal financing cases” and how this will affect banks and the Federal Reserve.
In addition, the Minister of Finance criticized Bitcoin (BTC) as a medium of exchange, not to mention its use as a store of value:
“I do not think Bitcoin is widely used as a transaction mechanism […] It is a very inefficient way of making transactions, and the amount of energy that goes into processing these transactions is unimaginable.”
Yellen talked about cryptocurrencies and BTC before she was sworn in on January 26. At a hearing to confirm her appointment as finance minister, she described cryptography as a “growing problem” in the United States, “mostly related to illegal funding.” Her subsequent written statements reflected these views on digital assets and illegal financing, but also included her plans to encourage the use of digital assets in the U.S. government for “legitimate activities.”
She is the first female secretary of state and previously served as Fed chairman under US President Barack Obama before leaving in early 2018. Yellen described Bitcoin as “somewhat worthless”, but has largely been silent about cryptocurrencies, and blockchain is even used by President Joe Biden.