Joe Biden would like former Fed president Janet Yellen, who is critical of Bitcoin, to lead the US Treasury. This position corresponds to that of a Minister of the Economy.
She would be the first woman in history to hold this position.
Since this rumor was reported in the Wall Street Journal, the cryptocurrency industry has gone back in time, reconstructing its policies for or against Bitcoin when it was at the helm of the Fed.
Who is Janet Yellen and what is her vision of Bitcoin?
Janet Yellen led the Federal Reserve from 2014 to 2018. She was, again, the first woman to lead the central bank of the United States. She became known as Ben Bernanke’s vice-president for her expansive policies, particularly following the 2008 crisis. She was among those who wanted to stimulate the economy with interest rates close to zero, and a massive purchase of government bonds.
It was therefore under his chairmanship that Bitcoin began to be overwhelmingly discussed, coinciding with some key episodes such as the speculative bubble at the turn of 2017 and 2018.
In this regard, it is worth mentioning some of his famous statements.
In 2014, following the closure of MtGox, which at the time was the most famous exchange crypto, before the US Senate Banking Commission, he said that Bitcoin was not regulated by the Fed:
„Bitcoin is a payment innovation that is occurring outside the banking industry. As far as I know, there is no intersection in any way between Bitcoin and the banks that the Federal Reserve has the ability to supervise and regulate. Therefore the Fed does not have the authority to supervise or regulate Bitcoin“.
These were also the days following the arrest of Charlie Shrem (at the time CEO of BitInstant) and Robert Faiella (implicated in Silk Road), both accused of money laundering. Precisely on the risk that BTC was used to launder money, Yellen said:
„The Fed has no authority over Bitcoin. But surely it would be appropriate for Congress to ask questions about the right legal structure for digital currencies.
It is not that easy to regulate Bitcoin because there is no central issuer or network operator. This is a global and decentralised [entity]… We are dealing with this.
In 2017 his judgement on Bitcoin was even worse, calling it „highly speculative“:
„Bitcoin plays a very small role in the payment system at the moment. It is not a stable source of value and is not legal tender. It is a highly speculative asset“.
However, he reiterated that the Fed could do nothing for Bitcoin:
„The Fed does not actually play any regulatory role in relation to bitcoin, other than to ensure that the banking organizations we supervise are vigilant, that they properly manage the interactions they have with the participants in that market and that they properly control the anti-money laundering, the responsibilities to act according to the banking secrecy they have“.
One of his last public statements about Bitcoin and cryptocurrency came in October 2018, when he was no longer running the Fed. at that time he said he was not a Bitcoin fan:
„I’ll just say I’m not a fan, and let me tell you why. I know there are hundreds of cryptocurrency transactions and maybe something more interesting is coming, but I think first of all, very few transactions are actually handled by bitcoin, and a lot of them that take place on bitcoin are illegal, illicit transactions“.
And it’s going to get worse:
„To be a useful currency, it must be a stable source of value, and bitcoin is anything but. So it is not used for many transactions, it is not a stable source of value, nor is it an efficient means of processing payments. It is very slow in handling payments“.
Illegal, unstable, practically useless a more negative view was hard to imagine.
Who knows that in recent years, and especially now that Bitcoin is moving towards new historical highs, Janet Yellen has changed her mind. Certainly times have changed: today Bitcoin is also used as a payment system, it has become an attractive product for banks, and initiatives and products for institutional investors have multiplied.
In any case, the appointment of Janet Yellen as the head of the US Treasury will be effective only when Joe Biden takes office as US President (January 2021) and will then have to be confirmed by the Senate.
A curiosity about Janet Yellen and her relationship with BTC should be mentioned: in 2017 during a hearing in the US Senate Finance Committee, while she was speaking, someone put up a sign with an unmistakable sign: „Buy Bitcoin“.