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Janet Yellen Confusing Stance on Cryptocurrency Creates Mixed Feelings 

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Janet Yellen Confusing Stance on Cryptocurrency Creates Mixed Feelings

Janet Yellen, the new Treasury Secretary of the United States, response to Senator Maggie Hassan question on cryptocurrency being used by terrorists and criminals has created mixed feelings across the crypto space.

Before the Senate Finance Committee, Yellen said “Cryptocurrencies are a particular concern. I think many are used—at least in a transactions sense—mainly for illicit financing.”

She further stated that she wanted to “examine ways in which we can curtail their use and make sure that [money laundering] doesn’t occur through those channels.

Yellen’s response plunged Bitcoin and other cryptocurrencies as investors interpreted it as ‘Biden administration going after cryptocurrency holders’.

Janet Yellen later clarified her response following the huge media coverage her response got and the resulting negative impact on the price of Bitcoin and other cryptocurrencies.

In the written testimony, the finance committee later asked her “Bitcoin and other digital and cryptocurrencies are providing financial transactions around the globe, like many technological developments, this offers potential benefits for the U.S., and our allies. At the same time, it also presents opportunities for states and non-state actors looking to circumvent the current financial system and undermine American interests. For example, the Central Bank of China just issued its first digital currency.”

“Dr. Yellen, what do you view as the potential threats and benefits these innovations and technologies will have on U.S. national security? Do you think more needs to be done to ensure we have appropriate safeguards and regulations for digital and cryptocurrencies in place?” 

Yellen replied: “I think it important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system.”

She continued, “At the same time, we know they can be used to finance terrorism, facilitate money laundering, and support malign activities that threaten U.S. national security interests and the integrity of the U.S. and international financial systems,” elaborating:

I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities.”

“If confirmed, I intend 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,” Yellen concluded.

In December, the Securities and Exchange Commission (SEC) filed a lawsuit against the world’s third most capitalised cryptocurrency, Ripple (XRP) to change its operation as currency.

The uncertainty surrounding what the new administration might do to regulate the crypto space continues to weigh on the cryptocurrencies.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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PBOC Instructs China’s Banks to Forbid All Cryptocurrency Related Activities Immediately

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China’s central bank has sent notice to the country’s financial institutions instructing them to stop dealing with cryptocurrency transactions.

The disclosure notes that the People’s Bank of China (PBOC) aims to protect Chinese citizens and “combat the speculation of Bitcoin and other virtual currency transactions.”

On June 21, 2021, the People’s Bank of China (PBOC) issued a notice to a number of financial institutions concerning crypto transactions.

The PBOC says it has discussed the issue of cryptocurrencies with financial services firms like the Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Postal Savings Bank, Industrial Bank, and the Alipay (China) Network.

The PBOC stressed that “virtual currency trading activities disrupt the normal economic and financial order, breed the risks of illegal cross-border transfer of assets, money laundering and other illegal and criminal activities, and seriously infringe the people’s property safety.”

China’s payment institutions and banks must implement strict guidelines on “bitcoin risks,” “token issuance financing risks,” and other regulatory requirements the PBOC notice details.

Financial institutions “must not provide account opening, registration, and registration for related activities,” the central bank added.

China’s Postal Savings Bank followed up with a statement and explained that it will not allow cryptocurrency transactions in any manner.

“According to relevant regulations of the People’s Bank of China, no institution or individual may use our bank’s accounts, products, services, and channels to conduct token issuance financing and ‘virtual currency’ transactions,” China’s Postal Savings Bank said.

The Postal Savings Bank also said if Chinese citizens notice crypto activity or any virtual currency “related behavior, you can report it to our bank.”

The PBOC news follows the June 20 mandate from Sichuan officials that banned bitcoin mining in the region. Since the banning in five major Chinese provinces, Bitcoin’s hash rate has plummeted to 100 exahash per second (EH/s).

Chinese journalist Colin ‘Wu’ Blockchain also tweeted about the PBOC notice on Monday and said two other financial institutions released statements concerning the subject. “The Agricultural Bank of China once again released the deleted webpage, and Alipay also issued a related statement,” the regional reporter said.

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Microstrategy Buys $489M Worth of Bitcoin —Now Holds 105,085 BTC

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The independent, publicly traded business intelligence company Microstrategy announced the acquisition of 13,005 bitcoin on Monday, at a purchase price of approximately $489 million in cash.

The company’s CEO Michael Saylor revealed the latest purchase on Twitter, and the firm now has more than 100,000 bitcoins on its balance sheet.

Michael Saylor’s firm Microstrategy now has approximately 105,085 bitcoins which it bought for around $2.741 billion. Using the purchasing average, the company says it purchased all the BTC at around “$26,080 per bitcoin, inclusive of fees and expenses.”

As usual, Microstrategy CEO Michael Saylor tweeted about the purchase telling his 1.2 million Twitter followers. “As of 6/21/21 we #hodl ~105,085,” Saylor noted on Monday morning.

Not everyone was impressed with Microstrategy’s bitcoin buy announcement and a few people like Peter Schiff made snide comments. “That’s pretty bearish that you already bought all that bitcoin and the price kept dropping anyway,” Schiff replied to Saylor’s tweet on Monday.

“Consider where the price of bitcoin would be today if Elon Musk, Michael Saylor, Barry Silbert, and all the other bitcoin elites and their friends in the financial media hadn’t spent the last six months convincing retail and institutional investors to buy their worthless tokens,” Schiff said the day prior, as bitcoin’s price began plummeting.

Northman Trader’s Sven Henrich also responded to Saylor’s announcement. “Understand the conviction. Question though: As the price average and employed leverage have both been rising what’s the risk profile/consequence if bitcoin were to drop below the average holding price?” Henrich asked the Microstrategy CEO.

When someone asked Henrich if Saylor’s choice turned out to be a good bet the Northman Trader further commented. “Not saying he’s wrong,” Henrich replied. “Just asking what the risk profile is if [the] price drops below the average holding price.”

Microstrategy’s purchase of 13,005 BTC follows recent news stemming from China’s central bank. On June 21, 2021, the People’s Bank of China (PBOC) issued a notice to a number of financial institutions concerning crypto transactions.

Since then, BTC has dropped 4 percent in 24 hours and rests just above the $32K handle. In other words, the price has actually dipped below the price Microstrategy paid per coin for this most recent BTC acquisition.

Other bitcoin proponents also responded to Saylor’s tweet. “Time to deploy the next billion,” software developer Jameson Lopp tweeted. An individual commented on Lopp’s statement and jokingly said: “Fixed it: Time to deploy the next borrowed billion.”

“Unfortunately, contrary to popular belief one just can’t keep infinitely buying the dip,” an individual said to the many enthusiasts telling the Microstrategy CEO to “keep buying the dip.”

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The US Government Auctions $377K Worth of Bitcoin and Litecoin

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The U.S. government sold Bitcoin and Litecoin worth $377K via the General Services Administration (GSA). The auction closed at 5 p.m. on Monday. The government auction house has sold digital assets in 11 lots and so far, the lots have seen active bidding.

From June 18 to Monday, June 21, the General Services Administration, otherwise known as the GSA, auctioned two types of crypto assets. GSA auction bidders buy 11 lots of crypto that hold approximately 8.93 BTC and 150.2 LTC.

The U.S. government estimates the value to be in the ballpark of $377,000 for the aggregate BTC and LTC lots. The GSA announcement notes that the entity has sold crypto assets on behalf of the U.S. government since the beginning of 2021.

To date, the GSA has auctioned crypto assets three times and sold 16.99 BTC in total. The three previous GSA auctions settled at $937,092 for the bitcoin assets sold on the platform. The GSA advertisement also tries to entice the reader by saying: “Become a part of the growing cryptocurrency community by placing a winning bid during GSA Auctions’ next cryptocurrency sale.”

“Experienced investors recognize a good opportunity when they see it, which is why our auctions have generated so much enthusiasm among the crypto community,” Thomas Meiron, Regional Commissioner for GSA’s Federal Acquisition Service said in a statement. “With the addition of a new type of cryptocurrency, this promises to be one of our most exciting auctions of the year.”

The new type of digital asset Meiron refers to is Litecoin (LTC), as prior auctions only saw the sale of BTC. The GSA was created in 1949 and is a solution for government-owned surplus, forfeited goods, and federal personal property they no longer require.

The independent agency of the U.S. government allows the general public, businesses, and other government agencies to bid on items in an exclusive fashion. Local and international GSA auction buyers are mandated to purchase electronically.

The electronic only-purchasing arrangement is due to the President’s declaration of a national emergency on March 23, 2020. Since then, the GSA no longer accepts payments made by cash, money order, cashier’s check, and official or personal checks.

The description of the crypto lots being sold explains that when a bidder wins they must accept the responsibility of paying the mining network fee. Bidding has been active so far and dozens of offers have been made on the GSA’s current stash of digital assets.

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