Janet Yellen Says 'Critical' to Establish Strong Crypto Regulation — 'We Haven't Suggested Outright Banning'

U.S. Treasury Secretary Janet Yellen says “it is critical to put in place a strong regulatory framework” for crypto on the sidelines of the G20 meeting for finance ministers and central bank governors. “We haven’t suggested outright banning of crypto activities,” Yellen added.

Janet Yellen on ‘Strong’ Crypto Regulation

U.S. Treasury Secretary Janet Yellen talked about crypto regulation in an interview with Reuters Saturday on the sidelines of the G20 meeting for finance ministers and central bank governors under India’s presidency in Bengaluru.

Yellen emphasized the importance of establishing a robust regulatory framework for cryptocurrencies while clarifying that the U.S. has not proposed an outright ban. The treasury secretary said: "We haven’t suggested outright banning of crypto activities, but it is critical to put in place a strong regulatory framework … We’re working with other governments."

Crypto regulation was among the key topics discussed by the G20 finance ministers and central bankers under India’s presidency this weekend. During the meeting, India asked the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to develop a joint paper on crypto in order to help formulate “a coordinated and comprehensive policy approach to crypto assets.”

Indian Finance Minister Nirmala Sitharaman has been pushing for international cooperation on crypto regulation for months. She said prior to the G20 meeting that India was having “detailed discussions” with G20 members on crypto regulation to establish a technology-driven regulator framework or standard operating procedure (SOP) on crypto.

In the U.S., the Securities and Exchange Commission (SEC) has recently stepped up its enforcement efforts against crypto firms. The SEC recently charged crypto exchange Kraken over its staking program and Nexo over its Binance USD (BUSD) stablecoin issuance. The securities watchdog also charged Terraform Labs and CEO Do Kwon for defrauding investors.

IMF Managing Director Kristalina Georgieva also said on the sidelines of the G20 meeting this weekend that crypto needs “more regulation.” While noting that there must be a “very strong push for regulation,” she said: “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, the executive board of the IMF provided guidance this week to help countries develop effective crypto policies. A few executive board directors thought that “outright bans should not be ruled out.” In addition, the board advised: “Crypto assets should not be granted official currency or legal tender status.”