Fed Chair Yellen: Blockchain could have a significant impact, no rules for now

Ahead of a hearing before a U.S. House of Representatives committee today, Federal Reserve Chair Janet Yellen said the U.S. central bank is “trying to understand” financial technologies such as cryptocurrencies and blockchain.

Yellen reportedly spoke before the Financial Services Committee, during which she was asked by Rep. Mick Mulvaney (R-Iowa) about the Fed’s relationship with cryptocurrencies and whether it was investigating blockchain applications internally.

While Yellen said the Fed is not currently doing so, she noted that the U.S. central bank is pursuing a wider range of fintech technologies. In addition, she believes that blockchain technology could have a significant impact on the payment and banking industries.

She told the committee members:

“This could have a very significant impact on payment systems and the conduct of commerce. We want to encourage innovation and I think using these innovative technologies could be very helpful and bring benefits to society.”

Yellen went on to say, “We are simply trying to understand the nature of fintech,” adding that the Fed is not currently pursuing any kind of rulemaking process.

Yellen first commented on Bitcoin and other digital currencies two years ago, when she noted that the Fed would not regulate them.

A recording of Yellen's testimony can be found below, with the relevant comments starting at 2:29:18.