Treasury Secretary Urges for More Aggressive Spending, President Biden Reveals $6T Spending Plan

While the crypto market is waiting for direction, Janet Yellen calls for more funding to run her agency and improve tax collection, while the proposed budget for the next fiscal year will bring US federal spending to the highest sustained level since World War II.

The price of Bitcoin is chopping between $32k and $42k, and Ether continues to trade around $2,800, but the market is not sure about what’s to come next. The total market cap is also stuck at around $1.7 trillion.

It is expected that Bitcoin may continue to trade sideways for months before it goes on to hit new highs.

Not to mention, the market is yet to get any clarity on China banning Bitcoin and mining. However, energy regulators of Sichuan are having a meeting with local power companies to analyze the impact of crypto mining.

Meanwhile, in the US, on the regulatory front, SEC Chair Gary Gensler is repeating what he has been saying since joining the agency.

This week, in prepared testimony to the financial services and general government subcommittee of the U.S. House Appropriations panel, he will tell lawmakers that cryptos are a highly volatile and speculative asset class that creates the risk of investor fraud and marketplace manipulation.

Not Enough Power?

In the short-term, things might remain uncertain, but in the medium-term and long-term, things are surely looking bright, and crypto is definitely here to stay.

A lot of new interests have been seen from institutions lately, with Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates revealing that he owns some Bitcoin and billionaire investor Carl Icahn sharing his plans to invest in crypto in a “big way” that involves over a billion dollars.

“Volatility may not be different this time, but everything else is,” commented trader and economist Alex Kruger.

As we reported, during this recent deep correction, short-term buyers, particularly those who bought after February, were the ones who sold their crypto assets.

Interestingly, “investor whales” were the ones who bought 77,000 BTC last week’s pullback, as per Chainalysis’s latest report.

Expansive Fiscal Policy

Tapering” has started to be heard at times after making it in the Federal Reserve’s minutes. Fed Vice Chairman Randy Quarles is actually the latest one to talk about gradually reducing the amount of stimulus because he is “quite optimistic about the path of the economy.”

But those in support of “tapering” are very few and far between. Even US President Joe Biden is not done with pouring more money into the markets.

He is now proposing a $6 trillion budget for the next fiscal year, which will bring US federal spending to the highest sustained level since World War II. Also, the Fed continues to be dismissive of inflation worries.

This will be Biden’s third domestic funding proposal of his presidency. His plan includes the American Rescue Plan of $1.9 trillion, a sequel to the $2.2 trillion pandemic relief bill, which was passed in March, the American Jobs Plan of $2.3 trillion, and the American Families Plan of $1.8 trillion for which the Biden administration detailed $1 trillion in new spending and $800 billion in tax credits this week.

Adding to this, today, Treasury Secretary Janet Yellen came out pretty strong in favor of spending. Yellen urged congressional leaders to have a more expansive fiscal policy, saying the government is operating on a budget that is behind the time of over a decade and that inflation-adjusted spending has remained stagnant for 11 years.

“We cannot continue to be good stewards of this recovery – and tackle the new bodies of work that Congress assigns to us in the years beyond – with a budget that was designed for 2010,” Yellen said in prepared remarks to the subcommittee on financial services and general government committee on appropriations.

Read Original/a>
Author: AnTy

Janet Yellen Torches Bitcoin Again, Calls it ‘Extremely Inefficient’ As A Payment Option

Janet Yellen Torches Bitcoin Again, Calls it ‘Extremely Inefficient’ As A Payment Option

U.S. Treasury Secretary is rooting for a digital dollar, but remains unconvinced about Bitcoin, which she describes as an inefficient asset.

U.S. Treasury Secretary Janet Yellen is not backing down with her criticism of Bitcoin. Yellen has gone on to describe the leading cryptocurrency as an “extremely inefficient” and “highly speculative asset.”

Bitcoin is Dangerous

Yellen commented at the New York Times’ “DealBook” conference, where she spoke on the country’s road to recovery post-covid-19.

Yellen had previously served as Federal Reserve chair under the Obama administration, having been appointed to replace Ben Bernanke from 2014 to 2018. She makes history as the first woman to be appointed as Treasury Secretary.

Her comments come as Bitcoin witnessed a sharp decline in prices, shedding off around $11,000 to $47K on Bitstamp. Bitcoin bounced back some moments later, regaining support and climbing back up to $51,500.

For Yellen, Bitcoin’s issues trump its benefits. While she acknowledges the role cryptocurrencies play in the financial system by creating quicker payment methods, she believes they have numerous problems. She raised concerns around its legitimacy and stability as an asset, bashing Bitcoin for its illicit financing links.

“People should beware it can be extremely volatile, and I do worry about potential losses that investors could suffer…I fear it’s often for illicit finance. It’s an extremely inefficient way to conduct transactions.”

Yellen also hinted at the possibility of the Federal Reserve hopping on the central bank digital currency (CBDC) bandwagon. While countries like China and Russia are making headway with their CBDCs, the U.S. has remained indecisive and is still unsure of what it plans to do.

Crypto’s Criminal Links

For Treasury Secretary Yellen, there’s one awful smell that hangs around cryptocurrencies—criminality. The crypto market should have gotten used to Yellen’s negative crypto comments by now. It has become a recurring theme with the high-ranking official. Earlier this month, she raised the alarm on how bitcoin was being abused for illicit purposes at a financial sector innovation roundtable. Yellen explained at the event,

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

While cryptos like Bitcoin and Ether are attractive to criminals due to their pseudonymous nature, recent studies from researchers show the tides are changing. Research from famed blockchain analysis firm Chainalysis revealed a decline in crypto-related crimes in 2020. The share of criminal activity was roughly $21.4 billion in 2019 of all crypto transaction volume, according to Chainalysis. That figure fell to 0.34$ or $10 billion in total transaction volume. Chainalysis believes the identification of criminal wallet addresses was a major catalyst for the drop in numbers.

Read Original/a>
Author: Jimmy Aki

US Senate Confirms Janet Yellen as Treasury Secretary; What Does This Mean for Crypto?

US Senate Confirms Janet Yellen as Treasury Secretary; What Does This Mean for Crypto?

The U.S Senate has confirmed Janet Yellen on Monday as the Treasury Secretary in the newly inaugurated Biden administration with an overwhelming 84-15 vote. She takes over this position from Steven Mnuchin, who served in the Trump administration and left office last week following Biden’s inauguration.

Yellen’s era comes when crypto stakeholders are especially keen on the regulatory developments that might affect the industry. The previous Fed chairwoman had stated that she is ‘not a fan of Bitcoin,’ referring to it as a highly speculative asset.

Recently, she rubbed shoulders with the crypto community following her take that most crypto activity is attributed to illegal operations. During the Senate Financial Committee oral testimony, Yellen’s written testimony further elaborated her stance on the issue.

“I think many [cryptocurrencies] are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use.”

Nonetheless, she recognizes the underlying potential in cryptocurrencies and their supporting technology. Yellen suggested that a more prudent approach would be keeping up with the changing tech dynamics that malicious actors leverage to circumvent U.S authorities or interests.

“We need to make sure that our methods for dealing with these matters, with tech terrorist financing, change along with changing technology,”

Pending Crypto Regulations

With Yellen assuming the Treasury Secretary office, she can pick up on some active issues that Mnuchin left pending. These include crypto-focused regulatory proposals such as imposing stricter oversight for crypto wallets; it is currently frozen as part of President Biden’s recent decision to halt all pending agency rulemaking.

Other proposed FinCEN rules include reporting $10,000 or more for U.S citizens who hold an equivalent amount of crypto assets overseas. The financial regulatory body also wants to place a KYC threshold requirement of $250 for U.S cross-border crypto and fiat transactions; this is currently capped at $3,000. Finally, the OCC proposed a regulation that favors an extension of banking services to crypto, which was yet to be forwarded to the Federal Register before Trump’s exit.

Yellen has since vowed that she would collaborate with the mandated financial bodies to advance Fintech regulatory frameworks’ work. She particularly vowed to,

“work closely with the Federal Reserve Board and the other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations.”

Read Original/a>
Author: Edwin Munyui

Bitcoin and MMT Critic Janet Yellen Picked as Treasury Secretary by Biden

President-elect Joe Biden has chosen former Federal Reserve Chairwoman Janet Yellen to become the next Treasury Secretary. Yellen, an economist, if confirmed by the Senate, will become the first woman to hold the position.

This holds meaning for the crypto market as Jake Chervinksy, a General Counsel at Compound Finance, said,

“This is the single most important decision for the next four years of US crypto policy. The next Treasury Secretary will have enormous influence on whether the right to financial privacy is upheld or sacrificed to mass surveillance & forced custodianship.”

For Wall Street, it could be good news as just last month she said the US needs to “continue extraordinary fiscal support.”

Yellen had been at the forefront of policy-making for three decades, which means nobody knows the Fed better than her. Not only will she be a great Treasury Secretary, but she will also help the government achieve its objective of increased coordination between monetary and fiscal policy, said crypto trader and economist Alex Kruger.

But not only Yellen is not a fan of MMT, having said that its proponents are “confused,” but she is not really a bitcoin proponent either.

Back in December 2017, at the height of the bull run, she called Bitcoin a “highly speculative asset.”

“Bitcoin, at this time, plays a very small role in the payment system. It is not a stable source of value, and it does not constitute legal tender,” she said at the time, adding that while the Fed is researching it, “I think to my mind, limited benefits from introducing it, a limited need for it and some substantial concerns.”

During Yellen’s testimony before the House Financial Services Committee in July 2017, someone photobombed her with the “Buy Bitcoin” sign.

Yellen-buy-bitcoin

In Oct. 2018, while explaining why BTC is not a useful form of currency, Yellen shared that she received “a gift of bitcoins.” Raz Suprovici, the founder of the bitcoin gifting service Biterica, had sent 0.0031642 BTC, worth about $20 at that time, which has now increased to roughly $60, to Yellen to make her understand it better.

Read Original/a>
Author: AnTy