Federal Reserve chairwoman, Janet Yellen, met with the Committee of Financial Services yesterday to discuss the Federal Reserve’s responsibilities on the financial system regarding regulations.
About two hours in, Representative Mick Mulvaney (R-S.C.) brought up the topic of blockchain technology to Yellen. Mulvaney, who recently teamed up with Rep. Jared Polis (D-Colo) to create the first-ever Congressional Blockchain caucus, asked Yellen if the Fed would consider implementing this technology.
Though the Federal Reserve is not looking to administer the technology into their organization, Yellen did confirm the bank is studying blockchain as well as other FinTech innovations. The chairwoman went on to say she did see blockchain technology’s potential to influence the way they handle business.
“It could have very significant implications for the payment system and the conduct of business,” Yellen said. “We want to foster innovation. I think innovation using these technologies could be extremely helpful and bring benefits to society.”
As of right now, the Federal Reserve is “simply trying to understand the nature of these innovations,” according to Yellen.
This is a major turnaround for Yellen who two years ago believed virtual currency should not be regulated by the Fed. Yellen’s enthusiasm towards blockchain technology has evolved since then. Back in June, the Federal Reserve along with central banks from 90 different countries, met with blockchain experts for a three-day event to discuss the technology and latest innovations. While Yellen was addressing her concerns for cybersecurity, she mentioned blockchain. She acknowledged that it was “undeniable” how blockchain and Fintech have influenced the global market. That being said, she urged all the banks to learn more about this technology to benefit their future.
**Video courtesy of GOPFinancialServices**