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Study Bitcoin & Blockchain, Federal Reserve Chair Tells Central Banks

Last Updated March 4, 2021 4:49 PM
Samburaj Das
Last Updated March 4, 2021 4:49 PM

 A recent event in Washington attended by representatives from over 90 central banks had Federal Reserve Chairwoman Janet Yellen encourage her counterparts to study emerging technologies, specifically mentioning bitcoin and the blockchain.

The Federal Reserve Annual Meeting, a three-day event hosted by the Federal Reserve, World Bank, and the IMF in Washington had a notable attendee this year in the Chamber of Digital Commerce (CDC). The group represents the blockchain industry and is the world’s largest trade association in the space.

This year’s gathering specifically focused on financial technology or fintech and with the aptly titled event “Finance in Flux: The Technological Transformation of the Financial Sector.” The theme of this year’s conference was on bitcoin’s underlying technology – blockchain and the FinTech sector.

Image courtesy: CDC

While the event was closed to the press, the CDC, in a press release, revealed that Janet Yellen, the Chair of the Board of Governors of the Fed Reserve, urged her fellow central bankers to study new innovation in the financial industry.

Notably, she mentioned bitcoin and blockchain specifically as innovations that needed to be understood by central banks. Stating that the global financial system had undeniably benefited from fintech, she encouraged central banks to ‘do all they can to learn about financial innovations including bitcoin, blockchain and distributed ledger technologies,’ the press release revealed.

Yellen has, in a stance that benefits bitcoin and blockchain innovation, stated that the Fed Reserve does not have the authority to regulate the cryptocurrency. At a hearing in Congress in early 2014, an event that was streamed live to a worldwide audience, Yellen stated:

Bitcoin is a payment innovation that’s taking place outside the banking industry. To the best of my knowledge there’s no intersection at all, in any way, between Bitcoin and banks that the Federal Reserve has the ability to supervise and regulate.

So the fed doesn’t have authority to supervise or regulate Bitcoin in anyway.

In a statement included in the CDC press release of the recently concluded event, Bitcoin Core Developer and Bloq CEO Jeff Garzik added:

Some of the greatest potential benefits of blockchain technology are going to be first seen actively leveraged in emerging nations.

While addressing the assembled group of central bankers, he reportedly spoke about the characteristics of blockchain technology. Ironically, the features he discussed included decentralization while talking to central bankers, cryptography, immutability, trust shifting and other features.

CDC Founder and President Perianne Boring joined Yellen in urging the Federal Reserve and other central banks to embrace blockchain technology.

She outlined the reason in a statement that said:

We believe blockchain technologies are capable of providing the Fed and other regulators with next generation tools to fulfill their mission of monitoring the safety and soundness of the financial system more effectively.

Featured image from Wikimedia.