US Federal Reserve Chair Jerome Powell has clarified that his institution does not want to hold large amounts of bitcoin, citing legal issues and a lack of desire for government involvement. This statement came as President-elect Donald Trump plans to create a Strategic Bitcoin Reserve, which has been met with skepticism from European central bankers.
Powell’s comments suggest the Fed is not looking to be involved in stockpiling bitcoin, and that any changes to laws regarding cryptocurrency ownership would need to be made by Congress. The idea of a government-led reserve has sparked debate about its viability as a store of value or unit of exchange.
Republican Senator Cynthia Lummis has introduced a bill to create such a reserve, which would require the approval of Congress and new Treasury debt funding. However, Fed officials have expressed concerns about the volatility of bitcoin, citing its lack of utility as a stable store of value.
The European Central Bank’s chief bank supervisor, Claudia Buch, has also flagged risks in the crypto market, including excessive leverage and conflict of interest. Trump plans to appoint a White House AI and Crypto Czar, but his pro-crypto stance remains a subject of debate.
Source: https://www.reuters.com/technology/fed-cant-hold-bitcoin-not-seeking-change-that-powell-says-2024-12-18