The US Federal Reserve plans to investigate PayPal, Bitcoin and other online banking systems to determine any potential risks associated with them, according to a report from The Wall Street Journal. Speaking at an international monetary conference in Shanghai on Monday, vice chairwoman Janet Yellen said "We have been talking at the Fed and with banking organizations, trying to understand what the concerns are with these new payment mechanisms."
The Fed just recently enacted new legislation for online banking providers, subjecting them to the same money-laundering rules and regulations as traditional banking institutions. These rules even apply to Bitcoin and other currencies that lack oversight from a central bank. The government has already seized accounts and brought charges against individuals suspected of using Bitcoin to launder money. Chairwoman Yellen did not elaborate on what kind of actions the Federal Reserve might take following its assessment of risks posed by these new banking institutions, but she did add "This is very much on our radar screen and we are carefully trying to identify where the risks are."