Speaking to Reuters, Yellen said that it was “critical to put in place a strong regulatory framework.” She also noted that the United States is not suggesting an “outright banning of crypto activities.”
Yellen’s remarks follow earlier ones from the International Monetary Fund (IMF) Managing Director Kristalina Georgieva, stating that banning crypto should be an option:
“There has to be very strong push for regulation… if regulation fails, if you’re slow to do it, then we should not take off the table banning those assets, because they may create financial stability risk.”
In addition, Georgieva pointed out to reporters that it is necessary to differentiate central bank digital currencies (CBDCs) from stablecoins and cryptocurrencies – which are issued by private companies.
Related: What are CBDCs? A beginner’s guide to central bank digital currencies
In an earlier conference, the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting under India’s presidency addressed key financial stability and regulatory priorities, Cointelegraph reported.
The country’s Finance Minister Nirmala Sitharaman called for a coordinated global policy to address the macro-financial implications of crypto assets. Sitharaman has historically supported working with other jurisdictions in the development of crypto regulations. For several years, India’s government has debated whether to regulate or even ban cryptocurrencies.
On Feb. 23, the IMF released an action plan on crypto assets, urging countries to abolish legal tender status for cryptocurrencies. The paper, titled “Elements of Effective Policies for Crypto Assets,” outlined a framework of nine policy principles addressing macrofinancial, legal and regulatory, and international coordination issues.
After a visit to El Salvador earlier this month, the IMF suggested the country reconsider its plans to increase exposure to Bitcoin, citing the cryptocurrency risk to El Salvador’s fiscal sustainability and consumer protection, as well as its financial integrity and stability.
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