Jerome Powell, the Chair of the Federal Reserve, clarified during a press conference that the central bank is prohibited from holding Bitcoin, leaving such decisions to Congress.
Fed’s Stance on Bitcoin
Responding to questions about the potential for the government to hold Bitcoin reserves similar to gold, Powell emphasized:
“We are not allowed to own Bitcoin. That’s the kind of thing for Congress to consider.”
He further reiterated that the Federal Reserve has no plans to alter its stance on Bitcoin, underscoring that the Federal Reserve Act restricts the institution from holding speculative assets like Bitcoin.
Despite expanding asset purchases during past economic crises, such as the 2008 financial crash, Bitcoin has never been a consideration for the Fed.
Bitcoin: Speculative Asset or Digital Gold?
Powell described Bitcoin as a speculative asset, likening its competition more to gold than the U.S. dollar. He reiterated his 2021 stance, stating that Bitcoin is not a reliable store of value due to its high volatility.
In contrast, Powell differentiated cryptocurrencies like Bitcoin from Central Bank Digital Currencies (CBDCs), which he considers significantly safer and more stable.
Trump’s Plan for a U.S. Bitcoin Reserve Sparks Market Buzz
The comments from Powell came amid growing speculation fueled by President-elect Donald Trump, who recently hinted at plans to establish a U.S. Bitcoin Strategic Reserve.
In a CNBC interview, Trump remarked:
“We’re gonna do something great with crypto,” drawing parallels to the U.S. Strategic Petroleum Reserve.
This speculation propelled Bitcoin to an all-time high of $106,000 earlier in the week.
Bitcoin Slumps After Powell’s Remarks
Following Powell’s dismissal of the idea of the Fed holding Bitcoin, the cryptocurrency experienced a 5.17% drop, trading at $101,170 at the time of writing.
The broader market also reacted negatively to the Fed’s decision to lower interest rates by 0.25%, bringing the target range to 4.25%–4.50%. The Nasdaq 100 fell by 2%, with major altcoins such as XRP, Cardano (ADA), and Litecoin (LTC) experiencing double-digit losses over the past 24 hours.
Bitcoin and the Fed: What Lies Ahead?
Powell’s comments highlight the cautious tone of U.S. regulators toward digital assets. While Bitcoin’s status as a speculative asset keeps it outside the Fed’s purview, growing interest in crypto-based reserves by influential figures like Trump may reshape the narrative in the future.
For more updates on cryptocurrency trends and regulatory insights, visit CentBit.Online—your trusted resource for Crypto & Blockchain Expertise in Bangladesh.
(SEO Optimized by CentBit.Online – Empowering Crypto Enthusiasts with Knowledge and Insights)
