The new Federal Reserve chairwoman Janet Yellen believes her organization has no authority to regulate Bitcoin, Yellen said during a confirmation hearing on Thursday.
During a hearing at the Senate Banking Committee, Sen. Joe Manchin (D-W.Va.) asked her about regulating Bitcoin. Yellen responded that regulating Bitcoin is not the Fed's prerogative.
See also: 5 Reasons Mt. Gox Won't Take Bitcoin Down With It
"To the best of my knowledge, there is no intersection in any way between Bitcoin and banks that the Fed has the ability to supervise and regulate," Yellen responded, according to Reuters' live blog. "The Fed does not have authority with respect to Bitcoin."
Yellen also added that one of the issues is that Bitcoin is "decentralized" and "global," according to Business Insider.
Just yesterday, Manchin called for an all-out ban on Bitcoin, following the a tumultuous week for the crypto currency. On Tuesday, Mt. Gox, once the largest Bitcoin exchange in the world, shut down amid allegations of a large cyber heist for a total of $350 million worth of its customers' bitcoins.
"This virtual currency is currently unregulated and has allowed users to participate in illicit activity, while also being highly unstable and disruptive to our economy," Manchin wrote in a letter he sent to Federal Reserve Chairwoman Janet Yellen, Treasury Secretary Jack Lew, and other federal financial regulators.
The Mt. Gox collapse has renewed calls for more regulation into the virtual currency. Sen. Tom Carper (D-Del.), chairman of the Homeland Security and Governmental Affairs Committee said in a statement that "U.S. policymakers and regulators can and should learn from this incident to protect consumers."
The Bitcoin Foundation, however, warned policymakers and regulators that this would be a mistake.
"If Bitcoin does not flourish in the United States, it will flourish elsewhere, and the United States will cede leadership to the countries with the more foresighted approach to innovation and economic progress," Patrick Murck, general counsel for the Bitcoin Foundation, said in a statement.
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