News Column

Fed has no authority to regulate bitcoin: Yellen

February 27, 2014

WASHINGTON, Feb. 27 -- (Kyodo) _ The U.S. central bank has no authority to regulate bitcoin, a virtual currency used for online transactions, and it would be difficult to even try to control it, Federal Reserve chief Janet Yellen said Thursday.

Bitcoin is a payment innovation taking place entirely "outside the banking industry," Yellen told a congressional session in connection with the recent halt of all bitcoin transactions by a major exchange based in Tokyo.

"I think it's not so easy" to regulate bitcoin because there is no central issuer or network operator to regulate untypical currencies, Yellen told the Senate Committee on Banking, Housing and Urban Affairs.

Yellen said there is no intersection between bitcoin and banks that the Fed supervises and regulates.

On the Fed's monetary policy, she said the central bank could finish the asset purchases part of its stimulus program in the fall if economic circumstance permits.

Yellen was cautious about clarifying exactly when the Fed will completely exit from quantitative easing, saying that asset purchases "are not on a preset course."

Since December, the Fed has slowed down its monthly purchase of Treasury bonds and agency mortgage-backed securities to $65 billion from its full size of $85 billion.

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Source: Japan Economic Newswire

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