Jerome Powell, Chairman of the US Federal Reserve, recently put to rest rumors that it might include Bitcoin in its reserve assets. After attending its two-day policy meeting in September, Powell made it clear that no such plans are in the works; furthermore, they do not intend to actively collect digital currencies like Bitcoin themselves.
Powell’s remarks came as an unexpected development amidst rate reductions by the Federal Reserve, signals of uncertain monetary policy and President Donald Trump appointing several figures with favorable stances towards cryptocurrency. Market response to Powell’s statements was swift with Bitcoin value decreasing 5.7% following his remarks as did that of other major cryptocurrencies such as XRP and EOS.
Bitcoin Not to Join Federal Reserve’s Reserves, Says Powell
Discussion surrounding whether the US should start collecting Bitcoin intensified following President Trump’s re-election, thanks in large part to his pro-crypto stance and promises of revamping SEC leadership. Powell remains firm in his assertion that the Federal Reserve Act, as written, does not permit ownership of assets like Bitcoin; any potential changes would need approval by Congress first.
Rising Interest in Bitcoin as a Strategic Asset
Although Powell remains skeptical, interest in Bitcoin as a strategic reserve asset has grown steadily. President-elect Trump voiced support for this idea during the election campaign and visioned America becoming a center of cryptocurrency innovation. Wyoming Senator Cynthia Lummis, an outspoken proponent for cryptocurrency innovation has actively campaigned for inclusion of this form of currency into national reserves through her proposal that calls for purchasing millions of tokens annually from Treasury until such time that sufficient quantities have accumulated to form one million tokens in total.
