The Federal Reserve has no intention of holding Bitcoin or supporting any legislative efforts to enable it, Chair Jerome Powell confirmed on Wednesday. Speaking at a press conference following the Fed’s two-day policy meeting, Powell clarified the central bank’s position amid growing speculation about a U.S. government strategic Bitcoin reserve under the incoming administration.
“We’re not allowed to own Bitcoin,” Powell stated firmly. Addressing the potential legal considerations, he added, “That’s the kind of thing for Congress to consider, but we are not looking for a law change at the Fed.”
His remarks came as President-elect Donald Trump floated the idea of establishing a U.S. Strategic Bitcoin Reserve. Trump’s proposal includes utilizing seized Bitcoin assets—estimated at 200,000 tokens worth approximately $21 billion at current prices—as part of the reserve. However, the specifics of the plan remain vague.
The Federal Reserve’s stance appears at odds with efforts by Republican Senator Cynthia Lummis, who has introduced a bill to create the reserve. Under her proposal, the U.S. Treasury would purchase 200,000 Bitcoins annually until the stockpile reaches one million tokens, funded by Fed bank deposits and gold holdings.
Powell’s statements sent Bitcoin prices tumbling, briefly falling below $100,000 after a sharp rally this year driven by Trump’s perceived pro-crypto policies. Bitcoin has more than doubled in value since the Nov. 5 election, fueled by optimism over a potential hands-off regulatory approach.
Despite its rapid ascent, Bitcoin remains a volatile asset. Analysts highlight its inconsistent utility as a store of value or medium of exchange—key characteristics of a reserve currency. The speculative nature of the crypto market has drawn skepticism from some policymakers and financial experts.
As the Fed signaled a less certain path for monetary policy in the months ahead, Powell underscored the institution’s focus on maintaining economic stability. He distanced the central bank from the emerging debate around cryptocurrency reserves, placing the onus on legislative and executive branches.
Trump’s Bitcoin initiative marks a significant shift in federal attitudes toward cryptocurrency, but its implementation faces hurdles. Critics argue that Bitcoin’s volatility and limited utility could undermine its viability as a reserve asset.
For now, Powell’s comments indicate that the Federal Reserve will maintain its distance from the speculative crypto market, leaving the fate of the proposed Bitcoin reserve in the hands of lawmakers and the incoming administration.
