'Bitcoin is a payment innovation that's taking place outside the banking industry'
The Federal Reserve does not have the authority to regulate the digital currency Bitcoin, Fed chief Janet Yellen said Thursday.
During her semi-annual testimony before the Senate Banking Committee, Yellen took on questions from Virginia Democratic Sen. Joe Manchin, who has called on federal regulators to ban the currency.
“Bitcoin is a payment innovation that’s taking place outside the banking industry,” Yellen said. “To the best of my knowledge there’s no intersection at all, in any way, between Bitcoin and banks that the Federal Reserve has the ability to supervise and regulate. So the Fed doesn’t have authority to supervise or regulate Bitcoin in anyway.”
The volatile currency has come under renewed scrutiny after a major Bitcoin exchange went offline earlier this week.
“Certainly it would be appropriate for Congress to ask questions about what the right legal structure would be for digital currencies,” Yellen said.