On Thursday, 7th April 2022, Janet Yellen called for crypto regulations to be similar to traditional financial systems. These words come as Jane Yellen and the treasury have been looking for ways to regulate the unfamiliar crypto space.
Janet Yellen Calls for More Crypto Regulation
Earlier today, Janet Yellen, the Treasury secretary, announced that the crypto space should be regulated the same way as traditional financial systems. This is a move by the treasury to bring the crypto world to the same level as the average U.S. system.
One of the ways Janet Yellen suggests regulating the crypto space is by controlling the taxing systems. Janet Yellen said in her speech, “Taxpayers should receive the same type of tax reporting on digital asset transactions that they receive for transactions in stocks and bonds, so that they have the information they need to report their income to the IRS.”
Her report shows that the U.S. government should first ensure cryptos follow tax laws similar to stocks and bonds. However, Yellen also talked about the technology and regulations around the tech world. As new techs come up, they open the path to new products and services. Hence, according to Yellen, innovations in crypto must be subject to tech-neutral regulations to help protect others from any security and fraudulent activities.
According to Yellen, “Our regulatory frameworks should be designed to support responsible innovation while managing risks – especially those that could disrupt the financial system and economy.” Thus, Yellen called for the regulation of cryptos and other assets to be standardized.
Biden’s Administration Focus on Controlling Crypto
The Biden administration has emphasized stricter measures to control the crypto world in the past months. Earlier, President Biden issued an executive order that urged the Federal Reserve to advise the central bank on whether they could create a digital asset. Also, the Federal reserve should offer directives around the impact of crypto assets on national security and financial stability.
A few months ago, the U.S. legislatures passed the $1 trillion bipartisan infrastructure bill, with severe implications for the crypto space. According to reports, the bill requires tax reporting from all crypto brokers, with every transaction of $10k+ being subject to reporting.
Over the past months, the SEC, Federal reserve, and treasure have all been trying to find different ways to regulate the crypto space. The U.S. government is settled on either controlling or killing the crypto world. In fact, in recent months, claims of crypto use in illegal activities have been the main reason watchdogs use to impose strict regulations on crypto.
Many crypto enthusiasts were displeased by the calls since the primary idea of crypto is independence from government control. However, another user claimed that Secretary Yellen has a valid point since Bitcoin is traded in the same way as stock.
Claims of Crypto Use in Illegal Activities
The U.S. allegedly uncovered high-profile money laundering cases involving crypto. Earlier in February, Secretary Yellen issued warnings on Bitcoin’s dangers to investors and the general public, suggesting that most crypto transactions are directly associated with illicit transfers. U.S. watchdogs have also suggested that Russians could use crypto to evade sanctions and called for stricter guidelines.