Bitcoin Forum

http://www.coindesk.com/federal-reserve-chair-us-central-bank-cant-regulate-bitcoin/

"After months of silence on the matter, Federal Reserve chairwoman Janet Yellen has stated that the US central bank does not have the authority to regulate bitcoin.

Yellen was appointed as chair of the Federal Reserve last October after she was nominated to replace Ben Bernanke.

During an address to the Senate Banking Committee on 27th February, the top US banking official, said:

    “The Fed doesn’t have authority to supervise or regulate bitcoin in any way.”

In her response, Yellen commented broadly on a score of issues including the impact of recent weather on US economic output, ongoing turmoil in the Ukraine and the new technologies that are more broadly impacting payments.

It was on the latter subject that the topic of bitcoin was introduced, with Yellen noting that such developments are “taking place outside the banking industry”.

Notably, the remarks came in response to a question about bitcoin regulation by US Senator Joe Manchin, a noted critic of bitcoin.

The news follows Manchin’s 26th February letter to the Federal Reserve chairwoman, which called for her to take aggressive action against bitcoin due to its involvement in criminal activity. The Bitcoin Foundation has also since responded to the letter.
Additional remarks

Yellen continued, saying that FinCEN has indicated that current money laundering statutes are “adequate to meet enforcement needs”.

Manchin later asked whether Yellen believed the US to be “behind the curve” in regards to regulation, a nod to his previously stated belief that the US should follow the lead of countries like China and Thailand in banning bitcoin.

Yellen said:

    “Certainly it would be appropriate for Congress to ask questions about what the right legal structure would be for digital currencies […] My understanding is Bitcoin doesn’t touch [US] banks.”

She ended her response by stating that the Federal Reserve is looking into the matter.

The statement notably comes at a time when many US state regulators are looking for guidance on how to put controls or safeguards on the bitcoin industry.

Though the most notable example would be New York, which held detailed hearings on the matter in January, Alabama and Texas have joined the conversation following the ongoing troubles at major Japan-based bitcoin exchange Mt. Gox."

Basically this ruling will apply to ALL crypto!

Maybe we actually can keep the jack-booted thugs of government OUT of at leat a few of our affairs!

My $.02.

;)

This is a huge win for cryptocurrency.
And great news for the people who will be fighting MtGox on their own. It's a small price to pay for the common good, so take it on the chin guys.

Reading between the lines, it looks like she is calling for congressional action on Bitcoin if they want it regulated.

Well! That's a tremendous news! I think this will make BTC less volatile as it won't lose it's independence

That's exactly right. However, Congress is only 1/3 of the power in the Government. The Judicial branch has already declared on two occasions that cryptography is a protected form of free speech.

Congress can't just pass any law they feel like. In the event that they do pass an unconstitutional law, the Judicial branch has the power to nullify it.

Considering the fact that there's already a precedent regarding cryptography, Congress passing a law hindering cryptography is no different than passing a law regulating religion, written words in a book, speaking negatively about the President, etc... It's without the force of law no matter how much they want it.

The law is made in the Legislative branch, enforced by the Executive branch, and judged by the Judicial branch. The Judicial branch already made a ruling that crypto is protected by the Constitution; any future law passed will be judged in court as if it were no a law at all; they can't so easily go back on their decision.


"In cases addressing other encryption software, however, two federal appeals courts have established the rule that cryptographic software source code is speech protected by the First Amendment (the Ninth Circuit Court of Appeals in the Bernstein case and the Sixth Circuit Court of Appeals in the Junger case)."