Janet Yellen is now officially the secretary of the U.S. Treasury Department. Yellen was confirmed by the Senate by a vote of 84 to 15, underscoring the bipartisan support she receives in the sharply divided legislature. She takes on the Treasury chief position after expressing her concerns over the use of digital currencies in illicit activities in her recent nomination hearing.
Yellen’s appointment in the key position comes at a time when the U.S. economy is facing one of its worst tests in history. In December 2020, the U.S. saw 140,000 jobs lost for the first time in eight months. The coronavirus pandemic has also led to a contraction of the economy, with many industries losing out on trillions of dollars in 2020.
Yellen will play a key role in defining the financial industry for the next four years. Many hope that her experience as the chair of the Federal Reserve will make her an asset for the industry. David Wessel, a senior fellow at the Brookings Institution, where Yellen most recently worked, believes her credibility with both Democrats and Republicans givers her an edge over her predecessors.
For the digital currency industry, Yellen’s confirmation signals a change. Yellen previously said she is not a fan of Bitcoin—but that was when she was still a Fed chair years ago, when the industry was mostly thought of as a hub for illicit activities.
Yellen alluded to this in her nomination hearing with the Senate recently. When asked about digital currencies, she replied:
The technologies to accomplish this change over time and we need to make sure that our methods for dealing with these matters, with tech terrorist financing, change along with changing technology, cryptocurrencies are a particular concern.
However, in a written record of her responses in the hearing, she revealed that she isn’t against digital currencies.
She stated, “I think it’s important we consider the benefits of cryptocurrencies and other digital assets and the potential they have to improve the efficiency of the financial system. […] I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities.”
Yellen further claimed that she would work with other regulators to implement an effective regulatory framework for digital currencies.