I think you are reading too much into the headline. Janet Yellen said the same thing in 2014--that the Federal Reserve had no authority to regulate Bitcoin:
https://blogs.wsj.com/moneybeat/2014/02/27/yellen-on-bitcoin-fed-doesnt-have-authority-to-regulate-it-in-any-way/In practice, that just means that regulation is under the jurisdiction of the government, not the central bank. In Yellen's case, she recommended that Congress act to regulate Bitcoin. At that time, Senator Joe Manchin and other Congressmen were calling for strict regulations or an outright ban on Bitcoin.