One way or another, Janet Yellen is likely to lead the US Department of the Treasury.
How that affects the digital currency realm is a major question.
Good-bye Secretary Mnuchin
Unless something obstructs the inauguration of Joe Biden as President of the United States on Jan. 20, Steven Mnuchin’s term as Secretary of the Treasury is ending. Biden already selected former Federal Reserve Chairperson Janet Yellen to head the Treasury Department.
Hello (Secretary) Yellen
One thing can be sure at this point. Janet Yellen will head the Treasury Department. There is a question, though, regarding her title. If the Republican Party continues to rule the Senate, Yellen’s prompt confirmation is not guaranteed. There are two reasons for this; one is almost a certainty.
First, there is personal or ideological animosity; this is relatively unlikely. Overall, American media are not pointing to her confirmation specifically. This is in contrast to the nomination of Senator Bernie Sanders as Secretary of Labor. Yellen is well known on Capital Hill, very experienced, and well-liked on Wall Street.
The second factor, though, is the ability of the Republicans to drag down all confirmation processes as much as possible on political grounds. This is highly likely.
Considering the strain on the economy given the COVID-19 pandemic, the need for Biden to place Yellen at the helm of Treasury is high. Politico points to President Obama appointing counselors to high positions. Moreover, this is a practice that the Trump administration used as well. Thus, the likelihood of Yellen assuming the role, whatever the formal title, is high.
Outsized inbox, outsized influence
Janet Yellen is expected to push forward Joe Biden’s goal of passing a strong stimulus package. The Guardian notes that this is only part of the issue. Wall Street will be especially sensitive to the way in which economic stimulus is withdrawn.
Moreover, her relations with current Federal Reserve Chairperson Jerome Powell will be a determining factor in Powell’s appointment to a second term as Chairperson in 2022. CNBC points out that Biden and Powell get along, and relations between Yellen and Powell could work out as well. If so, the Federal Reserve will continue much in its current direction until 2026.
There is the possibility that even a relatively anti-crypto incoming Treasury head could suddenly become a convinced bitcoinist, like Michael Saylor. However, Janet Yellen’s past statement regarding economic innovation point to a need to balance regulation with an evolving economic ecosystem.
Yellen’s determination to not end the pandemic-related stimulus too abruptly could affect cryptocurrency prices. Michael Saylor has pointed out that it was the first COVID-19 related stimulus and subsequent depreciation of the US dollar that turned him pro-crypto. How a Yellen-Powell team would affect a US Central Bank Digital Currency is another issue to watch for.