Janet Yellen’s Reign as US Treasury Secretary: Her Impact on Crypto

Janet Yellen – an American economist currently serving as the 78th US Secretary of Treasury – has displayed her anti-crypto position numerous times. During her 20-month reign, she has argued that bitcoin is unsuitable for conducting financial transactions and that people should not rely on investing in digital assets as part of their retirement strategy.

Some recent reports hinted that Yellen could leave her post after the midterms at the beginning of November. It remains unknown whether her successor will be more open to the digital asset sector or will continue to have a similar adverse policy.

Crypto Negativism in the Past few Years

Janet Yellen has rich experience as a US government official. In 1994, former President Bill Clinton nominated her as a member of the Federal Reserve Board of Governors. Three years later, she resigned to join the Council of Economic Advisers (CEA) as Chair.

In 2004, Yellen was appointed President of the Federal Reserve of San Francisco, becoming the first woman in US history to hold that position. In 2010, she returned to the Fed as Vice Chair of the Federal Reserve Board of Governors, later rising to Chair of the central bank.

During Donald Trump’s presidency, Yellen stayed away from politics. Between 2017 and 2021, she mainly delivered lectures across the United States and abroad and heavily criticized the billionaire’s administration.

Joe Biden’s election for President of the USA, though, changed the tides, and Yellen returned to the White House as a Secretary of Treasury.

Over the decades, she has not been so vocal regarding the cryptocurrency sector apart from the last two years. Shortly after gaining her latest position, the economist argued that bitcoin is a highly speculative and inefficient asset that criminals often use in their illicit operations.

A few months later, Yellen delivered her first speech dedicated entirely to cryptocurrencies. She maintained her stance that such coins are a threat to the financial system and that regulators should apply comprehensive rules to the industry.

Contrary to bitcoin and the alternative coins, the Secretary of Treasury claimed a potential launch of a digital dollar could be beneficial for the country and its national currency.

Remove Crypto From Retirement Plans

Yellen’s negative tone on digital currencies peaked this summer when she warned people that adding crypto to their retirement plans is not an appropriate step:

“It’s not something that I would recommend to most people who are saving for their retirement. To me, it’s a very risky investment.”

Nevertheless, Yellen has also shown brief signs of acceptance of the cryptocurrency industry. Days before her nomination as US Secretary of Treasury, she stated that digital assets have benefits that the authorities need to explore. The economist even added that blockchain technology has the potential to “improve the efficiency of the financial system.”

Her Influence on Crypto’s Development

Following the reports that Yellen might resign from her post, it is worth considering how such changes would affect the cryptocurrency industry.

The US Secretary of Treasury has a direct influence on the President since she acts as a principal adviser on economic issues. In addition, Yellen oversees the Ministry of Economy and Finance, meaning that all fiscal, taxation, printing, and other monetary policies must receive her approval before going live.

Her adverse vision of crypto might be one reason the US government has been rather aloof on the sector. It is yet to be seen how her successor (even if there’s one anytime soon) would approach the industry.

Given the significance of the position, it would be safe to assume that the cryptocurrency industry will be impacted in one way or another if Yellen continues to serve that role or if there’s a successor in place. Being still the world’s largest economy and among the leaders in terms of crypto adoption, the US is arguably the most important country for the industry.

We have seen how the actions of the SEC (in the case against Ripple or the refusal to approve a spot Bitcoin ETF), as well as the Fed’s monetary policy, have impacted it. Also, the Biden administration has already put the industry under its scope with executive orders and potential regulatory plans.

As such, having a Secretary of Treasury with a more open-minded approach to crypto could be highly beneficial and, unfortunately, vice-versa.

Featured Image Courtesy of BBC