YELLEN: Bitcoin is a ‘highly speculative asset’

Federal Reserve Board Chair Janet Yellen testifies on Capitol Hill.Susan Walsh/AP

• The Federal Reserve raised its key interest rate 25 basis points to a range between 1.25% and 1.50% at the conclusion of Wednesday’s meeting.
• At the accompanying press conference, Fed Chair Janet Yellen was asked about bitcoin.
• Yellen called the cryptocurrency a “highly speculative asset” and said the Fed is not seriously considering its own digital currency at this time.

The Federal Reserve lifted its benchmark interest rate 25 basis points to a range between 1.25% and 1.50% at the conclusion of Wednesday’s meeting and signaled it sees three rate hikes in 2018.

In the press conference accompanying the decision, Fed Chair Janet Yellen as asked about bitcoin by CNBC’s Steve Liesman. Yellen noted that bitcoin is “a highly speculative asset.” She added that the cryptocurrency “plays a very small role in the payments system” and that it’s not a “stable store of legal tender.”

Bitcoin has been garnering attention on both Wall Street and Main Street in the latter months of 2017. The cryptocurrency has soared more than 1,500% this year.

When asked if the Fed was considering its own digital currency, Yellen suggested there had been some discussions about the topic.

“There is a discussion about adopting a digital currency,” Yellen said. “There might be a central banker or two that might go in that direction. But I really want to caution that this is not something that the Federal Reserve is seriously considering at this stage.”

“I doubt that the Federal Reserve will go into that direction, but it is something that central banks are looking at to see if there could be benefits.”

Wednesday’s press conference was the final one for Yellen, whose term ends in February. The Federal Open Market Committee meets on January 30-31, but there’s no press conference scheduled at the conclusion of that meeting.

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