Bitcoin Price Drops As Jerome Powell Says Federal Reserve ‘Not Allowed’ To Hold BTC
The price of Bitcoin is testing $100,000 after Fed Chair Jerome Powell issued a statement on the central bank’s ability to hold BTC.
Powell took questions from reporters after announcing the Fed has lowered its key interest rate by a quarter percentage point in its third consecutive reduction.
When asked if he sees any value in the Fed building a Bitcoin reserve, Powell said current laws make it impossible.
“We’re not allowed to own Bitcoin. The Federal Reserve Act says what we can own and we’re not looking for a law change.”
The Federal Reserve Act outlines the types of assets the central bank can hold, primarily including US government securities, mortgage-backed securities, and other assets related to its monetary policy operations.
Powell says only a congressional act can allow the Fed to buy BTC – which is something he has no interest in.
“That’s the kind of thing for Congress to consider, but we are not looking for a law change at the Fed.”
Powell’s statement sent BTC from around $103,700 to as low as $100,241 in less than an hour.
President-elect Trump has said he will ensure the US stops selling its trove of seized Bitcoin on the open market and instead strategically hold the asset as an investment.
Early this week, when questioned by CNBC on whether he plans to build a strategic BTC reserve, Trump said “Yeah, I think so.” However, to date, Trump has not issued a statement on whether he believes the Fed or Treasury Department should accumulate BTC.
Wyoming Republican Senator Cynthia Lummis has introduced legislation that would direct the Fed to buy one million BTC over a five year period.
Whether her legislation will secure widespread backing within Congress remains to be seen.
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