Fed Excludes BTC Reserves: 'We Are Not Allowed to Own Bitcoin'

Federal Reserve Chairman Jerome Powell has rejected the idea of the Fed holding bitcoin, emphasizing the legal limitations, as US cryptocurrency policy and market dynamics change rapidly. Why the Federal Reserve can’t— and won’t— hold Bitcoin anytime soon Federal Reserve Chairman Jerome Powell reiterated the central bank's stance on bitcoin during a press conference on Wednesday after cutting interest rates. When asked about the possibility of the US government building a bitcoin reserve, Powell dismissed this possibility, citing legal limitations. He declared: We are not allowed to own bitcoin. The Federal Reserve Act specifies what we can own, and we are not seeking a change in the law. It's the type of issue that Congress needs to consider, but we are not seeking a change in the law at the Fed. Powell's comments are consistent with his cautious tone in relation to cryptocurrencies. In previous statements, he referred to BTC as a speculative asset, lacking stability to function as a legal tender. In 2021, Powell remarked that cryptocurrencies are "not really useful as a store of value" and criticized their volatility, which poses risks to investors and the financial system. He also distinguished between cryptocurrencies like bitcoin and central bank digital currencies (CBDCs), emphasizing that the latter is a safer and more controlled initiative. The Federal Reserve Act restricts the central bank's holdings of U.S. government bonds and other high-quality assets. Although the Fed has expanded its asset purchases during economic crises, including the 2008 financial crisis, cryptocurrencies remain outside the Fed's scope. Meanwhile, legislative efforts such as Senator Cynthia Lummis's Bitcoin Bill have aimed to integrate bitcoin into the U.S. financial system. However, these proposals have faced opposition from lawmakers concerned about the lack of regulations and potential misuse of cryptocurrencies. Furthermore, President-elect Donald Trump has announced plans to establish a national bitcoin reserve fund to position the United States as a global leader in cryptocurrency. This initiative involves the US government repurchasing a significant amount of held bitcoins, potentially using seized assets in criminal cases as a foundation. This proposal has significantly impacted the cryptocurrency market, with the value of bitcoin surpassing $100,000, reflecting investors' optimism about favorable regulatory changes under the upcoming administration. Additionally, Trump's appointment of David Sacks as the White House's AI and cryptocurrency expert emphasizes his commitment to integrating digital assets into the national economic strategy. DYOR! #Write2Win #Write&Earn $BTC {spot}(BTCUSDT)