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Jerome Powell states the Federal Reserve is not seeking to hold bitcoin or create a strategic reserve.
Federal Reserve Chairman Jerome Powell addressed the growing conversation around cryptocurrency and the potential for a government-managed Strategic Bitcoin Reserve. Speaking at a press conference following the Fed's latest policy meeting, Powell emphasized that the U.S. central bank has no intention of holding bitcoin or participating in any government effort to stockpile significant amounts of the cryptocurrency. He clarified that such decisions would require Congressional involvement and that the Fed is not advocating for any legislative change in this area.
This declaration came amid mounting speculation over the establishment of a U.S. bitcoin reserve, a proposal floated by President-elect Donald Trump and supported by some lawmakers, such as Republican Senator Cynthia Lummis. According to a proposed bill, the U.S. Treasury would acquire 200,000 bitcoins per year until a reserve of one million tokens is built up. These acquisitions would be covered through Fed bank deposits and gold reserves, leading to broader questions over the impact on the financial system.
While bitcoin's price has skyrocketed in recent months, partly on optimism about a more crypto-friendly U.S. administration, Powell and other Federal Reserve officials remain skeptical of the cryptocurrency's utility as a store of value or medium of exchange. Powell repeated that the Fed's role in relation to cryptocurrencies is mainly focused on ensuring their interactions with the banking sector do not pose a risk to financial stability. He further added that the Fed does not directly regulate cryptocurrency markets.
Global acceptance of cryptocurrencies is still highly reluctant. In Europe, some of the top officials of the ECB believe bitcoin cannot be a reserve asset because it is too volatile and speculative.
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