Treasury Secretary Yellen Calls for Cryptocurrency Regulation
The Facts
In a speech delivered at the American University in Washington on Thurs., US Treasury Secretary Janet Yellen called for more government regulation of digital assets, both to support innovation and regulate risk.
This follows an executive order signed by Pres. Biden in Mar. directing federal agencies to explore the potential risks and benefits of blockchain technology, as well as the possible creation of a central bank digital currency (CBDC).
The Spin
Narrative A
The regulation of cryptocurrencies is an attempt to control what is feared. It will hurt innovation and come at the expense of crypto companies who will have to foot the bill to accommodate new rules. This will pressure crypto innovators to move abroad where laws are more lenient, putting the US at risk of losing its pivotal role in this industry.
Narrative B
Digital currencies are a fast-growing market, and government regulations will benefit all involved. They will potentially create more stability, protect long-term investors, prevent fraudulent activity, and provide clear guidance to companies. Increased regulations are a clear win-win for everyone.
Narrative C
The question isn't whether regulations should be implemented, but rather how they should be administered. The government needs to recognize that the world of digital assets is fundamentally different from any other financial market, and regulations must be tailored accordingly. Otherwise, we run the risk of playing an indefinite game of cat and mouse.