The idea of the U.S. establishing a Bitcoin reserve has sparked a lot of conversations lately, and now, a Federal Reserve official has weighed in with his perspective.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, recently shared that while the discussions are interesting, there are serious legal limits on what the Fed can hold on its balance sheet. But is a Bitcoin reserve still possible, or is it just another pipe dream?
Goolsbee’s comments come after Federal Reserve Chair Jerome Powell reaffirmed that the Fed cannot hold Bitcoin due to the Federal Reserve Act. Powell has also stated that the Fed has no plans to seek a change in the law. In 2021, he added that Bitcoin’s volatility makes it an unreliable store of value.
Despite the Fed’s stance on holding Bitcoin, Powell has been more open to other aspects of cryptocurrency. In a recent press conference, he stated that banks can now offer cryptocurrency custody services, following the SEC’s decision to remove the controversial SAB-121 guidance.
The announcement was well received by the crypto community, causing Bitcoin’s price to rise.
Powell’s recent description of Bitcoin as a “digital version of gold” aligns with the views of many Bitcoin supporters. However, the idea of a U.S. Bitcoin reserve now seems less likely, with the chances of it being established by April dropping to just 16%. Still, most expect the reserve to be created later this year.
While a national Bitcoin reserve may be on hold, several states, including Texas, Florida, and Ohio, are looking into creating their own Bitcoin reserves. However, it remains uncertain how many of these efforts will succeed. Cynthia Lummis
Outside the U.S., there is also resistance to the idea of Bitcoin in national reserves.
European Central Bank President Christine Lagarde recently stated that she is confident Bitcoin will not be included in the European Union’s reserves. She emphasized that central bank reserves must be secure, liquid, and free from criminal activities like money laundering.
Her comments came after the head of the Czech National Bank suggested that Bitcoin could make up 5% of the country’s reserves, reigniting debate over Bitcoin’s role in national finance.
In response to these ongoing developments, Senator Lummis stressed the importance of the U.S. acting quickly to establish a Bitcoin reserve and maintain a competitive edge. “If you’re not first, you’re last,” Lummis said, emphasizing the need for the U.S. to secure its place in the digital asset world.
While the Trump administration is exploring the idea of a Bitcoin reserve, no official announcements have been made.
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