US Treasury Secretary Janet Yellen will call for increased scrutiny of cryptocurrencies on Thursday, after President Joe Biden gave the green light last month to work on creating a digital US dollar.
Digital currencies such as bitcoin and ethereum have seen explosive growth in recent years, even as US officials have raised concerns about whether the assets are properly regulated or could be used for criminal activity.
In a speech at the American University of Washington, Ms. Yellen will call for better regulation of these assets to ensure consumer protection, while enabling innovation.
“As banks and other traditional financial firms become more involved in digital asset markets, regulatory frameworks will need to appropriately reflect the risks of these new activities,” Ms. Yellen said, according to speech excerpts published by the Treasure.
“And, new types of intermediaries, such as digital asset exchanges and other digital native intermediaries, should be subject to appropriate forms of oversight.”
Mr. Biden’s order last month placed the United States among more than 100 countries that are exploring or have launched pilot programs with their own central bank digital currencies, including the Chinese digital yuan.
Washington has also sought to expand taxation of cryptocurrencies, with Congress passing a trillion-dollar national infrastructure overhaul last year, including provisions to expand reporting requirements for digital assets.
Governments around the world fear that cryptocurrencies are being used to finance illicit activities.
On Tuesday, Germany shut down the illegal Russian-language darknet market Hydra, the largest such network in the world, and seized bitcoins worth $25 million.
The US Treasury has sanctioned this site and Garantex, a virtual currency exchange it claims was used to collect ransomware payments.
Ms Yellen will call for “technology-neutral” regulation of assets, which aims to protect consumers without hampering the technology behind cryptocurrencies.
“In many cases, regulators have powers they can use to promote these goals and the Treasury supports these efforts,” Ms Yellen will say.
“To the extent there are gaps, we will make policy recommendations, including an assessment of potential regulatory actions and legislative changes.”
(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)