Bitcoin’s price tests $100,000 after Fed Chairman Jerome Powell issued a statement on the central bank’s ability to hold BTC.
Powell answered questions from reporters after announcing that the Fed has cut its key interest rate by a quarter of a percentage point for the third time in a row.
When asked if he sees any value in the Fed building up a Bitcoin reserve, Powell said current laws make this impossible.
“We are not allowed to own Bitcoin. The Federal Reserve Act says what we can own and we are not looking for a change in the law.”
The Federal Reserve Act outlines the types of assets the central bank can hold, which primarily include U.S. Treasury bonds, mortgage-backed securities, and other assets related to its monetary policy operations.
Powell says only an act of Congress could allow the Fed to buy BTC – something he has no interest in doing.
“That’s something Congress needs to think about, but we’re not looking to change the law at the Fed.”
Powell’s statement sent BTC from approximately $103,700 to $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 assets as investments.
When CNBC’s Jim Cramer asked Trump early this week if he plans to build a strategic BTC reserve, Trump said, “Yes, I think so.” However, to date, Trump has made no statement regarding the Fed’s direct purchase of BTC.
Republican Senator Cynthia Lummis of Wyoming has introduced legislation that would call for the Fed to buy one million BTC over five years.
Whether her legislation will gain broad support within Congress remains to be seen.
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