US recognises crypto’s role in financial innovation, Treasury secretary Yellen says

• Crypto has grown in 'leaps and bounds,'  says US Treasury secretary Janet Yellen.
• She adds that crypto innovation in the financial system can be a “healthy thing.”
• The US will look to provide a regulatory environment that supports the innovation in the industry, Yellen told CNBC in an interview.

US Treasury secretary Janet Yellen says the United States recognises cryptocurrency’s role in the country’s financial system.

According to Yellen, crypto has seen significant growth over the past few years- in what she said was in “leaps and bounds.” 

She added that most Americans now use crypto not just for transactions but increasingly as investment assets.

Crypto innovation can be a ‘healthy thing’

Despite acknowledging her own skepticism about crypto, she noted crypto has benefits and was a critical player in the innovations seen across America’s financial system.

“There have been benefits from crypto and we recognise that innovation in the payment system can be a healthy thing,” the former US Federal Reserve Chair told CNBC.

She referenced the recently signed “Executive Order on Crypto” and said Treasury and other government agencies have the task of giving regulatory recommendations that support innovation in the sector.

Regulators continue to examine the crypto space in a bid to provide the right regulatory guidelines, she noted. The end result, she opined, is the need to have “recommendations that will create a regulatory environment” that supports innovation.

Regulations around cryptocurrency have mainly been around concerns about potential risks to financial stability and illicit activities such as money laundering and tax evasion. 

There have also been concerns about consumer protection, which remains the case even as regulators seek to ensure they don’t stifle beneficial innovations with bad regulations.

Bitcoin sees upside to $45k

Yellen's comments come just a day after Russia had signaled the possibility of accepting Bitcoin for its oil and gas amid sanctions.  

Russia's move combined with other macro factors to help drive positivity in the market, with Bitcoin rallying to above $45,000.