Treasury nominee Janet Yellen says illegal digital currency use a ‘particular concern’

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U.S. Treasury Secretary nominee Janet Yellen has said the illicit use of digital currencies like BTC in money laundering and other financial crimes was a “particular concern,” sparking suggestions tighter regulation could be in the pipeline.

The former chair of the Federal Reserve made the comments at her confirmation hearing in the U.S. Senate, highlighting the difficulties facing law enforcement in tackling money laundering and terrorism financing posed by cryptocurrencies.

The statement was given in response to a question from Senator Maggie Hassan (D-NH) about what a Yellen Treasury would do to curtail the threats of financial crime from emerging technologies.

In the question, Sen. Hassan specifically mentioned the threat posed by digital currency, winning the agreement of Yellen in response. The comments are already fueling speculation about the implications for digital currency regulation, should Yellen be confirmed as Treasury Secretary in due course.

Suggesting the government needs new tools to prevent money laundering through cryptocurrency exchanges, Yellen said of digital currencies that “many are used at least in a transactions sense mainly for illicit finance.”

“You’re absolutely right that the technologies to accomplish this change over time, and we need to make sure that our methods for dealing with these matters, with terrorist financing, change along with changing technology. Cryptocurrencies are a particular concern. I think many are used—at least in a transaction sense – mainly for illicit financing. And I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.”

The comments could highlight the upcoming change in policy direction towards digital currency as the new Biden administration is ushered into office. There are already suggestions the Treasury could drop the so-called “wallet rule,” as well as overturning other policy steps taken by the previous administration.

Yellen served as the chair of the Federal Reserve between 2014 and 2018. There is no date set for the vote on Yellen’s confirmation, through there are suggestions this could happen in the near future.

See also: CoinGeek Live panel on Regulation of Digital Assets & Digital Asset Businesses