Janet Yellen Consider employ new financial technologies to moves against misuse of cryptocurrencies

The new United States Treasury Secretary, Janet Yellen has warned about an explosion of risk associated with digital markets and misuse of cryptocurrencies

She said that new financial technologies could help fight crime and reduce inequality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.”

Blockchain-based financial networks are attractive to criminals because they do not require users to identify themselves—as the law requires most conventional financial networks to do. Because no individual or organization controls these networks, there’s no easy way for governments to force them to comply with money-laundering laws.

“Innovation should not just be a shield to protect against bad actors. Innovation should also be a ladder to help more people climb to a higher quality of life.’

Advocates of bitcoin and other cryptocurrencies – which are not regulated by a central authority – say that the rapid growth in the market means illicit transactions play a smaller and smaller role.

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Once a bitcoin exchange identifies who initially received a particular bitcoin payment, law enforcement can often trace subsequent payments through a blockchain network’s open payment ledger.

What you should know

1.The increasing level of interest in bitcoin led the UK regulator to warn potential buyers in January that they could “lose all their money” , thanks to the wild swings in the value of the token.

2.There is significant risks that transacting in cryptocurrencies could portend, which includes the risk of loss of investments, money laundering, terrorism financing, illicit fund flows and other criminal activities.

3. US government is hypocritical, because big banks and the dollar play a much bigger role in funding illegal activity.

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