Treasury Secretary Janet Yellen recently stated that any regulation that may be imposed on cryptocurrency should be based on risks, not technologies, in a speech before American University’s Kogod School of Business Center for Innovation. Yellen’s comments come around a month after President Biden’s executive order in March which directed the Treasury Department to begin developing crypto guidelines through further research of the asset class.
According to Future Perfect Ventures founder and CEO Jalak Jobanputra, regulation is what will ultimately strengthen the legitimacy of cryptocurrency as a burgeoning asset class.
“So I always believed that there would be regulation when this sector in the industry grew to the point where there were a lot of users. And so I believe it’s a net positive,” Jobanputra told Yahoo Finance Live. “I mean, there are those in the sector that don’t want to see any sort of regulation. But in order for the sector to grow, I think we are going to have to be regulated, and it’s important that the regulators understand what this technology is about.”
Jobanputra joined Yahoo Finance Live to discuss bitcoin dropping below $42,000, crypto regulation, and the future of cryptocurrency. Future Perfect Ventures is a New York-based, early stage venture fund which invests in next generation technology.
Jobanputra’s thesis about the cryptocurrency space standing to benefit from regulation echoes that of other business leaders like Domain Money CEO Adam Dell. She also said that she views Yellen’s recent comments as an indication that cryptocurrency as a sector is here to stay.
“We started Future Perfect Ventures in 2014, when Bitcoin (BTC-USD) was niche and often considered a negative and the realm of nefarious activity,” she added. “We’ve come a long way since then, to the point where major regulators around the world are recognizing the positive elements of this technology and how the transparency and efficiency that crypto technologies such as Bitcoin can provide.”
Amid these regulatory discussions, however, losses have steepened for both bitcoin and Ethereum (ETH-USD) — the cryptocurrencies are currently toying with key support levels at the $40,000 and $3,000 levels, respectively. The rising rate environment has made for a rough go for the crypto space as investors look to de-risk their portfolios. Experts now anticipate that the Federal Reserve may get even more aggressive in their inflation-curtailing efforts, with some expecting a May rate hike of as much as 50 basis points.
But for now, Jobanputra believes that Bitcoin remains as the flagship cryptocurrency paving the way for innovation and security in the industry.
“But what we’re starting to see is innovation happening back on Bitcoin,” she said. “We certainly have seen it play out as a store of value, as a hedge against inflation, as we’ve seen these expansionary monetary policies around the world over the last couple of years. But at the end of the day, Bitcoin is the most secure blockchain that exists right now.”
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV
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