During a Friday interview with CNBC, Janet Yellen, U.S. Treasury secretary said that cryptocurrencies were an innovative way to pay and offer many benefits for users.

“Crypto has obviously grown by leaps and bounds, and is now playing a significant role not really so much in transactions but in investment decisions of lots of Americans…There are benefits from crypto, and we recognize the innovation in the payment system can be a healthy thing,” Yellen said in the interview.

It is an unexpected reversal by the Treasury Department. The Treasury Department did not approve changes to the infrastructure bill last year. This made crypto tax reporting difficult and expensive for individual users. They also imposed crypto sanctions in order to stop ransomware.

“To the extent it [Bitcoin] is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering…It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer,” Yellen said during an interview with CNBC in February 2021.

She went on to say in Friday’s briefing that the Treasury plans to make common sense regulatory recommendations that address consumer and investor protections, reduce criminal use of crypto, maintain stability of financial markets without stifling innovation. It’s possible that the change in her outlook could be driven by President Biden’s executive order earlier this month that charged most of the agencies within the executive branch to research and report back as to how their respective organizations can craft and enforce the much-needed regulatory alchemy for cryptocurrencies.

Of particular note in the president’s directive were the six areas of focus that the cross-agency study group will address. The White House has outlined these priorities in a fact sheet. They include U.S. leadership and participation in global financial systems and economic competition; financial stability and responsible innovation; protection of investors and consumers; financial inclusion and illegal finance.

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