Fed chairwoman casts doubt on Bitcoin regulation in the US
Yellen dampens hopes of lawmaker seeking cryptocurrency ban
The head of the US Federal Reserve has said that her office will not imposing any regulatory controls or restrictions on the Bitcoin cryptocurrency.
Chairwoman Janet Yellen told a congressional committee that the Reserve lacks the authority to impose regulations on Bitcoin and she cast doubts on the ability for other government financial agencies to crack down on the platform.
"To the best of my knowledge there is no intersection at all in any way between Bitcoin and banks that the Federal Reserve has the ability to supervise and regulate," Yellen told a committee which included Bitcoin critic Senator John Manchin (D-WV).
"The Federal Reserve simply does not have authority to supervise or regulate Bitcoin in any way."
Yellen's comments come on the heels of an open letter Manchin's office issued, which asked Yellen and other government financial regulators to impose controls on Bitcoin.
In addition to clearing her own office of the task, Yellen noted that even with direct intervention by lawmakers imposing regulations on cryptocurrencies will prove difficult.
"It certainly would be appropriate for Congress to ask questions about what the right infrastructure would be," Yellen said.
"It is not so easy to regulate Bitcoin because there is no central issuer or network operator to regulate, this is decentralized. "
Manchin has said that he could seek such government controls. The senator cited crackdown efforts in China and Thailand as leading the way in enforcement of regulations on Bitcoin. Manchin has alleged that the currency is complicit in criminal activity, serving as an anonymous method for individuals to transmit money in drug deals and other illegal transactions.
In an open letter of its own, the Bitcoin Foundation has challenged Manchin's claims. The group said that it hopes to establish a "safe and sane" regulatory environment and that Manchin's fears of the currency as a criminal tool were overblown.
"There are risks, but we are confident that they are not as dire as your letter suggests. Because Bitcoin is a public ledger, records of transaction are published and available online for all time. This is a far more transparent system than conventional financial services and payments, in which the vast majority of transactions are concealed," wrote foundation general counsel Patrick Murck.
"Indeed, a challenge for Bitcoin adoption is making sure that law-abiding people’s transactions do not expose their private financial information."