Janet Yellen Suggests ‘Cutting Down’ Cryptocurrencies Like Bitcoin, Claiming They Are Primarily Used For Illegal Funding | Currency News | Financial and business news

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Janet Yellen, President-elect Joe Biden’s candidate for Treasury Secretary, suggested on Tuesday that lawmakers “restrict” the use of cryptocurrencies such as bitcoin, fearing they will be “primarily” used for illegal activities.

There has been a resurgence of interest in bitcoin; its price jumped about 300% last year. Bitcoin was down 7.59%, to $ 34,183.57 on Wednesday, while Ethereum was down 9.74%, to $ 1,259.97, after hitting an all-time high of over $ 1,430 on Tuesday .

Yellen’s comments suggested that the incoming Biden administration could be hostile to cryptocurrencies and step up regulation. Watchdogs around the world, from the European Central Bank to the UK financial regulator, have recently expressed concerns about cryptocurrencies such as Bitcoin.

Senator Maggie Hassan asked Yellen during her confirmation hearing on Tuesday about the dangers of terrorists using cryptocurrencies.

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“You are absolutely right that the technologies to accomplish this change over time, and we need to make sure that our methods of dealing with these issues, along with terrorist financing, change with the evolution of technology,” Yellen said.

“Cryptocurrencies are of particular concern. I think a lot of them are used – at least in a transactional sense – primarily for illicit financing.

“And I think we really need to look at ways in which we can reduce their use and make sure money laundering doesn’t happen through those channels.”

Yellen’s comments echoed those of ECB President Christine Lagarde, who said last week that Bitcoin had been used for “grossly reprehensible money laundering activity.”

Major investors have expressed similar concerns. Warren Buffet said last year that “Bitcoin has been used to move a fair amount of money illegally.” He said investors would have to “pack short” because criminals would no longer need them to carry money.

Cryptocurrencies are digital currencies that have no physical form and are not controlled by a centralized authority such as a central bank. This means that they are largely unregulated and not found, which makes them attractive to criminals.

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But their supporters say the lack of central control makes them attractive in other ways. For example, they claim that Bitcoin can protect against degradation of national currencies when central banks launch huge stimulus programs.

Bitcoin bulls are extremely excited about the recent rise in the price of cryptocurrency.

“The King of Crypto is the foundation layer of an emerging alternative financial system,” said Paolo Ardoino, chief technology officer of the Bitfinex crypto exchange.

“Bitcoin provides a solid foundation for an impressive range of projects, some of which will fundamentally change the nature of money by the end of the decade,” Ardoino added. Bitcoin products include funds and options.

Regulators have called for caution. Earlier this month, the UK’s Financial Conduct Authority said people who invest in cryptocurrencies like Bitcoin and Ethereum may well “lose all of their money.”

Read more: We spoke to the crypto platform Gemini, backed by the Winklevoss twins, about Bitcoin, how to use stablecoins and why regulation won’t kill the digital currency boom.