Federal Reserve Chair Jerome Powell has dismissed any chances of the central bank adding Bitcoin to its balance sheet, pointing to legal constraints under the Federal Reserve Act. Speaking at a press conference on December 19, Powell confirmed that the institution has no plans to seek legislative changes to enable such actions.
Jerome Powell’s Take On Bitcoin Reserve Formation
“We’re not allowed to own Bitcoin,” Powell explained. “The Federal Reserve Act outlines what we can hold, and we’re not pursuing any amendments to that law. Changing the law is something for Congress to consider, but it’s not something we’re looking at.”
Following Powell’s remarks, Bitcoin price experienced its first price decline in the last four days. The BTC price dropped by 5.9%, landing at $100,605, after reaching an all-time high of $108,000 on December 18. Market reactions were further dampened by the Federal Reserve’s cautious stance, as Powell indicated that monetary policy has become “significantly less restrictive” after a full percentage point reduction in interest rates this year.
JUST IN: 🇺🇸 Fed Chair Jerome Powell says “we’re not allowed to own #Bitcoin” pic.twitter.com/SQnNfqnTni
— Bitcoin Magazine (@BitcoinMagazine) December 18, 2024
Future rate cuts, Powell said, would be guided by economic data, particularly inflation trends and labor market performance. “Our decisions moving into 2025 will depend heavily on progress in these areas,” he noted.
Despite the price dip, blockchain analytics firm Santiment highlighted Bitcoin’s resilience. In a recent analysis, the firm stated, “Bitcoin remaining above $100K despite Powell’s comments and market volatility shows a degree of underlying strength. Over the next 24-48 hours, we might see this play out positively.”
Trump Advocates for Strategic Bitcoin Reserve
Meanwhile, President-elect Donald Trump has reiterated his ambition to establish a Bitcoin reserve for the United States, a proposal he first introduced during his campaign. Speaking on December 12, Trump emphasized the importance of staying competitive in the global crypto space.
“We’re going to do something great with crypto,” Trump declared. “We don’t want other nations, like China, taking the lead while we stand by. We need to be ahead.”
Currently, the U.S. government holds 212,847 Bitcoin, valued at over $22 billion, largely from law enforcement seizures. However, it remains unclear if Trump’s proposed reserve would include these holdings or require new acquisitions from the market.
Also Read: Breaking: US State of Ohio Introduces Bitcoin Reserve Act
