The Federal Reserve Board doesn’t have the authority to regulate bitcoin, Fed Chair Janet Yellen said Thursday.
“To the best of my knowledge, there’s no intersection at all in any way between bitcoin and banks the Federal Reserve has the ability to supervise or regulate,” Yellen told members of the Senate Banking Committee. “The Federal Reserve simply does not have authority to supervise or regulate bitcoin in any way.”
Yellen was responding to questioning from Sen. Joe Manchin, D-W.Va., who sent the Fed and other banking regulators a letter on Wednesday calling on them to ban — or at least curb — the decentralized, virtual currency’s use in the United States. Manchin has expressed concerns about bitcoin’s anonymity making it appealing for criminals.
“It certainly would be appropriate, I think, for Congress to ask questions about what the right legal structure would be for, you know, virtual currencies that involve nontraditional players,” Yellen said. The Senate Homeland Security and Governmental Affairs Committee is putting together a report on virtual currencies, a committee aide said in an email Wednesday.
Bitcoin was introduced by a programmer or programmers by the name of Satoshi Nakamoto in 2009. There is no central issuer of the cryptocurrency, which is “mined” by computers as they solve complex math equations. “It’s not so easy to regulate bitcoin, because there is no central issuer or network operator to regulate,” Yellen said Thursday.
The Fed chair was appearing before the committee to deliver her semiannual monetary policy report to Congress.