NEW YORK: Federal Reserve Chair Jerome Powell said on Wednesday (Dec 18) the US central bank has no desire to be involved in any government effort to stockpile large amounts of bitcoin.
“We’re not allowed to own bitcoin,” Powell said at a press conference following the Fed’s latest two-day policy meeting, in which policymakers cut rates as expected while signalling a less certain path for monetary policy in the months ahead.
In terms of the legal issues around holding bitcoin, “that’s the kind of thing for Congress to consider, but we are not looking for a law change at the Fed”, Powell said.
The Fed chief was addressing the prospect of central bank involvement in the idea of the government building a so-called Strategic Bitcoin Reserve once President-elect Donald Trump takes office.
Powell’s comments dented the value of bitcoin, which has rallied sharply along with other crypto assets since Trump’s victory in the Nov 5 election on the prospect of a more hands-off government approach to a class of assets that rarely functions as actual money, but is instead largely used as a vehicle for speculation.
Trump has suggested he will create a US bitcoin strategic reserve. But the incoming president has not provided details on what such a reserve would entail, beyond saying its initial holdings could include bitcoin seized from criminals, a stockpile of about 200,000 tokens worth about US$21 billion at current prices.
Bitcoin has more than doubled this year to more than US$100,000 on optimism over Trump’s pro-crypto stance. The asset has proven volatile in its 15 years of existence, which analysts say reduces its utility as a store of value or a unit of exchange, key attributes of a reserve currency.
