Minister Of Finance Janet Yellen Remains Sceptic About The Future Of Cryptocurrency

US Finance Minister Janet Yellen hopes that the turmoil in the cryptocurrency market will not spread to the banking sector. (photo: Twitter @secyellen)

JAKARTA - US Treasury Secretary Janet Yellen on Wednesday, November 30 said the recent turmoil in the cryptocurrency market did not spread to the banking sector. But he remains skeptical about the industry and believes that it requires adequate regulation.

Yellen told a New York Times DealBook event that it is important to ensure that crypto assets have adequate customer protection.

"I am skeptical, and I remain skeptical," he said.

He added it was important to remain open to financial innovation, especially if they could lower cross-border transaction costs and help increase financial inclusion, but he said the latest developments were not so.

"I think everything we've been through in the last few weeks, but before that, said it was an industry that really needed to have adequate regulations. And it didn't," said Yellen.

Cryptocurrency exchange FTX, which filed for bankruptcy in Delaware on November 11, said it owed it to its 50 biggest creditors nearly USD 3.1 billion (IDR 48.5 trillion). High-profile crypto booms caused about 1 million subscribers and other investors to face total losses in billions of dollars.

Yellen said in the DealBook that the United States was involved in discussions with allies about regulating cryptocurrencies. They have also made a number of reports mapping out "significant" issues.

One of the top priorities, he said, is ensuring the protection of customers' assets and the separation of these assets to prevent problems as seen in FTX.

The cryptocurrency crisis is a "Lehman moment" for the sector, Yellen said, referring to the 2008 bankruptcy of investment bank Lehman Brothers, which triggered a large stock market drop and led to a bailout of US$700 billion (Rp10971 trillion) by the US government.

"The good part of an explosion as we can see is that it hasn't spread to the banking sector. Banking regulators are very careful with crypto," he said. "This is a Lehman moment in crypto, and crypto is big enough that we suffered huge losses with investors."