During the meeting, Yellen addressed three areas relating to cryptocurrency — speculation, regulation and government-issued digital currencies. On the nature of Bitcoin, she commented that though the cryptocurrency has seen a remarkable growth in recent months, it is still a “highly speculative asset” and “not a stable source of value.” She also noted that Bitcoin remains a very small part of the overall payment system.
Yellen also commented on the Fed’s relationship to Bitcoin. She reiterated her 2014 position that the Fed does not have the authority to regulate the cryptocurrency. On Wednesday, she confirmed that the scope of the Fed’s regulatory power extends only to those banking institutions that they already supervise, stating:
“The Fed doesn’t really play any regulatory role with respect to Bitcoin, other than assuring that banking organizations that we do supervise are attentive, that they are appropriately managing any interactions they have with participants in that market, and appropriately monitoring anti-money laundering, bank secrecy act responsibilities that they have.”
Yellen noted that the Fed does not differentiate between Bitcoin and any other type of currency — the central bank is responsible for supervising other banks, regardless of the currency being used.
During the conference, Yellen also made a distinction between decentralized digital currencies like Bitcoin that are neither issued nor given value by any particular state, and digital currencies issued by governments themselves.
She stated that, though central bankers globally are discussing the option of making centralized digital currencies that constitute legal tender, at the present moment, the Fed has no serious intention of introducing a digital dollar. She stated:
“I really want to caution, this is not something the Federal Reserve is seriously considering at this stage. While we’re looking at research on this topic, there are, I think to my mind, limited benefits from introducing it, a limited need for it and some substantial concerns.”
This year multiple governments around the world have indicated their intention to research and implement a national digital currency. Just in the past few months, the governments of Catalonia and Russia declared their interest in issuing their own official digital currencies. Other states, such as Dubai, have already officially decided to do so.