Paul is insisting on a vote on his Fed transparency bill, and has told the Senate leadership of his intentions to block the nomination of Janet Yellen, the source said.
"As part of Senate consideration of the Janet Yellen nomination to be chair of the Federal Reserve, I will request a vote on my bipartisan Federal Reserve Transparency Act, S. 209," Paul said in a statement following reports of his decision. "The American people deserve transparency from the federal reserve and the federal government as a whole."
A Senate Democratic aide told CNBC Friday the ability of Paul to single-handedly block the nomination "should not be overstated" because he would need 40 other senators to back his effort to block Yellen's nomination.
Although hearings have not been scheduled yet, the aide said the Democratic leadership was confident Yellen would be confirmed.