‘Explosion of threat’: Yellen will combat misuse of cryptocurrencies

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Cryptocurrencies and digital belongings used for illicit functions are a rising downside, US treasury secretary says.

US Treasury Secretary Janet Yellen has warned about an “explosion of threat” from digital markets, together with the misuse of cryptocurrencies, however mentioned new monetary applied sciences may additionally assist combat crime and scale back inequality.

In remarks to a monetary sector innovation roundtable, Yellen mentioned on Wednesday that such applied sciences might be used to stem the movement of darkish cash from organised crime and combat again towards hackers, but in addition to cut back digital gaps in the USA.

She mentioned the passage of the Anti-Cash Laundering Act in December would enable the Treasury Division to remodel a framework for combatting illicit finance that has been largely unchanged because the Nineteen Seventies.

“The replace couldn’t have come at a greater time,” Yellen advised policymakers, regulators and personal sector specialists. “We’re residing amidst an explosion of threat associated to fraud, cash laundering, terrorist financing, and information privateness.”

She referred to as the misuse of cryptocurrencies and digital belongings a rising downside.

Cyberattacks

The COVID-19 pandemic had triggered extra – and extra refined – cyberattacks aimed toward hospitals, colleges, banks and the federal government itself, she mentioned.

Cryptocurrencies and digital belongings supplied promise, however they’d additionally been used to launder the income of on-line drug traffickers and to finance “terrorism”.

Innovation within the sector may assist handle these issues whereas giving hundreds of thousands of individuals entry to the monetary system, she mentioned.

Yellen, who has promised to prioritise preventing inequality and disparities, mentioned the pandemic had uncovered big issues, together with the dearth of broadband entry in lots of areas of the nation.

She mentioned accountable and equitable innovation may make an enormous distinction.

“Innovation mustn’t simply be a defend to guard towards unhealthy actors. Innovation must also be a ladder to assist extra individuals climb to the next high quality of life,” she mentioned.