Federal Reserve chair Janet Yellen labeled bitcoin a “highly speculative asset” that isn’t subject to regulation by the U.S. central bank.
Asked about bitcoin, she noted that, in the organization’s view, bitcoin “plays a very small role” in the U.S. payment system.
She then went on to say:
“It is not a stable store of value and it doesn’t constitute legal tender,” Yellen said, before continuing.
“It is a highly speculative asset and the Fed doesn’t really play any role, any regulatory role with respect to bitcoin other than assuring that banking organizations that we do supervise are attentive that they’re appropriately managing any interactions they have with participants in that market, and appropriately monitoring anti-money laundering [and] Bank Secrecy Act responsibilities that they have.”
Asked about directives for banks on bitcoin, Yellen answered that the Fed hasn’t given any to banks on the subject.
Yellen’s remarks are not much of a departure from the one she made in 2014.
Back in 2014, Yellen stated that the US central bank does not have the authority to regulate the cryptocurrency.
“The Fed doesn’t have authority to supervise or regulate bitcoin in any way,” she said at the time.
“Certainly it would be appropriate for Congress to ask questions about what the right legal structure would be for digital currencies […] My understanding is Bitcoin doesn’t touch [US] banks,” she added.
Then in January of this year, Yellen described blockchain as an “important technology.”
“[Blockchain] is a very important, new technology that could have implications for the way in which transactions are handled throughout the financial system.
“We’re looking at it in terms of its promise in some of the technologies we use ourselves and many financial institutions are looking at it. It could make a big difference to the way in which transactions are cleared and settled in the global economy.”
Compared to central banks like those in countries like China, the Fed has kept its hands off cryptocurrency, turning its focus on research.
And perhaps disappointingly for some, there were no “buy bitcoin” signs on display during Yellen’s appearance today.
This was unlike an incident in July when Yellen testified before Congress, one attendee had a placard that said “buy bitcoin.”
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