Janet Yellen Offers A Balanced Stance on Cryptocurrencies After Earlier Comments Led to Bitcoin Carnage

President Joe Biden’s treasury secretary nominee Janet Yellen displayed a change of stance on cryptocurrencies in a statement to the U.S. Senate Finance Committee on Thursday.

What Happened: Responding to a question on what she saw as potential threats and benefits of Bitcoin (BTC) and other digital currencies, Yellen said it is important "we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system.”

Earlier this week, Yellen had expressed concerns about the use of cryptocurrencies in the financing of illicit activities and invited criticism from Bitcoin supporters including Ark Invest’s Cathie Wood.

What’s Next: The former Federal Reserve Chair reiterated her view on the potential misuse of cryptocurrencies against U.S. national security interests.

“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 told the Senate committee. 

“If confirmed, I intend to work closely with the Federal Reserve Board and the other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations.”

Price Action: Bitcoin traded 8.5% lower at $31,764.25 at press time early Friday. Ethereum (ETH) traded 10.6% lower at $1,175.70.

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