FORTUNE -- Bitcoin enthusiasts have had a rough week. The collapse of the world's largest bitcoin exchange, Mt. Gox, shook investors faith in the currency, sending the price of bitcoin to a low of $418.78 on Feb. 25 from a high of $1,151 just a few months before.
The currency has since recovered some of that lost value, but the incident has left many wondering about the future of the world's most famous cryptocurrency. One thing is for sure, though: the biggest threat to bitcoin isn't from the failure of private bitcoin-related institutions but the chance that public regulators like the Federal Reserve will crack down hard with stifling regulations.
MORE: How Mt.Gox went down
That's why bitcoin boosters should have let out a sigh of relief when Fed Chair Janet Yellen said in no uncertain terms that her institution will not be regulating the currency anytime soon. "It's important to understand that this is a payment innovation that's happening outside the banking industry," Yellen said at a Senate Banking Committee hearing Thursday morning. "The Federal Reserve simply does not have the authority to regulate bitcoin in any way."
The answer came in response to West Virginia Senator Joe Manchin's questions about bitcoin, which belied intense distrust of the currency. Manchin called bitcoin an "unstable currency" that he believes is being used mostly for illegal activities. Manchin was seemingly disappointed with Yellen's statement that the Fed had no authority to regulate bitcoin, saying he believed there would be an intersection between bitcoin and Fed-regulated banks in the near future.
Yellen didn't budge, telling Manchin that if he wanted further oversight of the currency, Congress could take action to require it. Otherwise, she said, any regulation would be under the purview of the Justice Department and the Treasury Department.
The White House's desperate attempts to stem the political fallout from Obamacare may not be enough for the Democrats to hold onto the Senate.
By Nina Easton, senior editor
FORTUNE -- The 2014 mid-term elections are looming, and swing-state Democrats are nervous. Meanwhile, the White House is scrambling to minimize its Obamacare-inflicted hardships on Americans through a growing list of exemptions and delays. Will it be enough to keep the Senate MOREDec 27, 2013 5:00 AM ET
As Democratic Senator Max Baucus plans to step down, his party's leaders want to push him to meet them in the middle on corporate tax reform.
By Tory Newmyer, writer
FORTUNE -- With the news Tuesday that Senator Max Baucus, chairman of the tax-writing Finance Committee, will not seek a seventh term in 2014, prospects for a comprehensive overhaul of the corporate tax code appeared to brighten. In this case, appearances are MOREApr 23, 2013 1:38 PM ET
JPMorgan diverted more of its cash into "hedges" at a time when the bank was doing less and less lending.
Fortune -- It's time for Jamie Dimon to give up the hedging excuse. No one is going to believe it for much longer.
On Wednesday, Dimon, CEO of JPMorgan Chase (JPM), will testify in front of the Senate Banking Committee. It's Dimon's first trip to Capitol Hill - he's scheduled to return MOREStephen Gandel, senior editor - Jun 13, 2012 6:00 AM ET
A top Bank of America executive said the bank "deeply regrets" its failure to properly handle some foreclosures.
Barbara Desoer, who runs the mortgage business at the nation's biggest lender, told the Senate Banking Committee Tuesday that BofA's (BAC) efforts to deal with delinquent borrowers have failed to meet expectations. The bank's moves "have not met all of the needs nor have they been executed well in some cases," she said.
The MOREColin Barr - Nov 16, 2010 5:15 PM ET
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