Janet Yellen on sound Bitcoin Regulation
It is refreshing to hear Ms. Yellen consider the costs as well as the benefits of regulation and understands the need to proceed cautiously so as not to hamper innovation in the space.
Following a July meeting of the House Committee on Financial Services’ Monetary Policy and Trade, Committee Vice Chair Rep. Mick Mulvaney (R – SC) submitted questions to Janet Yellen, Chair of the Federal Reserve. Mulvaney has been a long-time champion for Bitcoin. He, along with Reps. Goodlatte and Polis, recently joined us on Capitol Hill to host a briefing for congressional staffers with Bitcoin industry leaders.
In his questions, Rep. Mulvaney asked about Bitcoin regulation and what Bitcoin’s rising popularity says about public perception of the Federal Reserve’s conduct of monetary policy. Ms. Yellen responded on Monday:
The costs and benefits of developing new statutes or regulations related to digital currencies should be weighed carefully. New regulation, such as the creation of special licenses for digital currency providers, may work to strengthen the soundness of virtual currency schemes and increase public trust in the products, as some may refrain from investing in or using digital currencies due to a perceived legal uncertainty and/or lack of consumer protection. On the other hand, new regulation would need to be flexible enough to address effectively the evolving nature of digital currency systems and technology while not stifling innovation.
We are thrilled to see that House members are taking an active interest in digital currency technology and using their position to keep regulators accountable on the subject. Further, it is refreshing to hear Ms. Yellen consider the costs as well as the benefits of regulation and understand the need to proceed cautiously so as not to hamper innovation in the space.