US Treasury Secretary Janet Yellen Calls for Strong Regulatory Framework

US Treasury Secretary Janet Yellen Calls for “Strong Regulatory Framework” for Crypto Activities

US Treasury Secretary Janet Yellen stressed the importance of implementing a strong regulatory framework for cryptocurrencies during a G20 meeting on Feb. 25.

Speaking to Portal, Yellen said it was “crucial to put in place a strong regulatory framework.” She also noted that the United States is not proposing a “total ban on crypto activities.”

Yellen’s comments follow earlier comments from International Monetary Fund (IMF) Managing Director Kristalina Georgieva, who stated that banning crypto should be an option:

“There has to be a very strong pressure on regulation…if regulation fails, if you’re slow to do it, then we shouldn’t take these assets off the table because they can pose a risk to financial stability.”

In addition, Georgieva told reporters that there is a need to differentiate central bank digital currencies (CBDCs) from stablecoins and cryptocurrencies issued by private companies.

Related: What are CBDCs? A beginner’s guide to central bank digital currencies

At a previous conference, the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting under the Indian presidency addressed key financial stability and regulatory priorities, Cointelegraph reported.

The country’s finance minister, Nirmala Sitharaman, called for coordinated global policies to address the macrofinancial impact of crypto assets. Sitharaman has historically supported working with other jurisdictions to develop crypto regulations. For several years, the Indian government has been debating whether to regulate or even ban cryptocurrencies.

On Feb. 23, the IMF released an action plan on crypto assets, urging countries to scrap legal tender status for cryptocurrencies. The paper, titled “Elements of Effective Policies for Crypto Assets,” outlined a framework of nine policy principles that address macrofinancial, legal and regulatory, and international coordination issues.

Following a visit to El Salvador earlier this month, the IMF suggested the country reconsider its plans to increase exposure to Bitcoin, citing the cryptocurrency’s risk to El Salvador’s fiscal sustainability and consumer protections, as well as its financial integrity and stability.