Federal Reserve Chair Jerome Powell stated on Wednesday that the central bank has no intention of supporting or participating in a government effort to stockpile bitcoin, rejecting the idea of a U.S. Strategic Bitcoin Reserve proposed by President-elect Donald Trump.
“We’re not allowed to own bitcoin,” Powell said during a press conference following the Fed’s two-day policy meeting, where policymakers cut rates as expected while signaling uncertainty about future monetary policy. Powell emphasized that any legal considerations regarding such a reserve would be for Congress to address, and the Fed was not seeking changes to its mandate.
Bitcoin, which has surged past $100,000 following Trump’s election win, fell slightly after Powell’s remarks. The cryptocurrency’s rally has been driven by optimism over Trump’s perceived pro-crypto stance, including his suggestion of creating a bitcoin reserve partially funded by tokens seized from criminals. Republican Senator Cynthia Lummis has proposed legislation for the Treasury to purchase 200,000 bitcoins annually, but analysts say such plans would likely face Congressional resistance and stiff opposition from the Fed.
Powell reiterated skepticism toward bitcoin’s utility as a reserve currency, citing its volatility and speculative nature. He also noted that the Fed’s focus remains on safeguarding the banking system rather than regulating cryptocurrencies directly.
European officials echoed Powell’s stance, dismissing the viability of bitcoin as a reserve asset due to its instability. ECB policymaker Olli Rehn affirmed that while cryptocurrencies are assets, they do not meet the criteria of currency.
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