As more and more of the world has become familiar with the virtual currency Bitcoin, it has gained acceptance from several industries, popular websites and users. While Bitcoin allows anonymity when paying someone and has little or no regulation, the virtual currency is very volatile with values ranging in the hundreds to sometimes over $1,000 dollars. It’s this fluctuation, and the baggage that can go with anonymity, that has lawmakers wondering about possible regulation.
Well in an interesting turn of events, Engadget, reports that the new Federal Reserve Chairwoman, Janet Yellen, has said that the central banking system has no authority over Bitcoin.
Speaking to the Senate Banking Committee Yellen testified; “this is a payment innovation that is taking place entirely outside the banking industry.” “This is a payment innovation that is taking place entirely outside the banking industry and to the best of my knowledge there is no intersection at all” she added.
In a world where privacy has been threatened at every level, as revealed last year by Edward Snowden, may people have turned to Bitcoin and other virtual currencies just to maintain their privacy and to keep their money out from under the governments eyes.
However this may not be all said and done, especially at the federal level. Yellen added later in her testimony; “it certainly would be appropriate, I think, for Congress to ask questions to what the right legal structure would be”
Sen. Joe Manchin (D. W.Va) asked Yellen about regulating Bitcoin. Yellen cited challenges in doing so saying “It’s not so easy to regulate bitcoin because there is no central issuer or network operator to regulate,”.
For now it appears that Bitcoin is free of interruption from the US government but it will continue to come up in discussions in and out of Congress that may eventually lead to some kind of regulation. That just won’t come from the Federal Reserve, at least not right now.