Federal Reserve Chair Jerome Powell has made it clear that the US central bank has no desire to be involved in any government effort to stockpile large amounts of bitcoin. Powell stated that the Fed is not allowed to own bitcoin and that any legal issues surrounding its holding are a matter for Congress to consider.
The comments came as a response to the idea of a Strategic Reserve, which President-elect Donald Trump has suggested creating. The reserve would involve the government building a stockpile of bitcoin, which could include bitcoin seized from criminals. However, Powell’s comments have dented the value of bitcoin, which has rallied sharply since Trump’s election victory.
Powell’s comments also highlight the Fed’s skepticism towards securities like bitcoin. The Fed’s main role regarding cryptocurrencies appears to center on how those assets might affect consumer and banking sector safety. Powell has stated that the Fed regulates and supervises banks and would want the interaction between the crypto business and the banks to not threaten the health and well-being of the banks.
The idea of a Strategic Reserve has been met with skepticism by some, including Barclays analysts, who suggest that it would likely face stiff resistance from the Fed. The creation of such a reserve would require the approval of Congress and the issuance of new Treasury debt.
Trump has also announced plans to appoint former PayPal executive David Sacks to the newly-created position of White House AI and Crypto Czar, and pro-crypto consultant Paul Atkins to lead the Securities and Exchange Commission.