Michaela
Federal Reserve Chair Jerome Powell has reaffirmed that the central bank cannot own Bitcoin. However, Senator Cynthia Lummis proposes a plan to enable the Federal Reserve to hold the cryptocurrency.
During a press briefing following the year’s final Federal Open Market Committee (FOMC) meeting, Powell reiterated that the central bank is neither authorized nor inclined to hold Bitcoin as part of its reserves. He also emphasized that the Federal Reserve has no plans to advocate for legislative changes to permit such actions.
With President-elect Donald Trump set to take office, interest in cryptocurrencies is on the rise. However, Powell’s statements have made it clear that the central bank remains hesitant to integrate Bitcoin into its monetary policy framework.
There is a notable policy divide regarding the dollar’s dominance in global markets. The Federal Reserve is focused on preserving this dominance. In contrast, some members of the incoming Trump administration are interested in exploring alternative reserve assets.
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Experts argue that establishing a Strategic Bitcoin Reserve could spark tensions between regulatory agencies and the executive branch, further complicating efforts to incorporate Bitcoin into federal financial systems.
On the other hand, Senator Lummis has taken a contrasting approach, introducing a proposal aimed at granting the Federal Reserve the authority to hold Bitcoin as part of its reserves.
In a recent interview with Yahoo Finance, Lummis outlined her proposal, which calls for the U.S. government to acquire 200,000 Bitcoin each year for the next five years, ultimately amassing one million Bitcoin. The plan also includes holding the Bitcoin for a minimum of 20 years.
According to Lummis’ projections, the Bitcoin reserve could appreciate to a value of $16 trillion over time. “I want our federal government to have a strategic Bitcoin reserve that can help back the US dollar,” Lummis said.
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Lummis stressed that a Bitcoin reserve could offer multiple benefits, including bolstering the U.S. dollar and addressing some of the challenges associated with the country’s large debt.
In a post on X, Lummis expressed enthusiasm about collaborating with President-elect Trump’s pick for Crypto Czar, David Sacks, on comprehensive digital asset legislation and her proposed Bitcoin reserve. “This will be the most pro-digital asset administration ever!” she wrote.
Read More
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- Peter Schiff Urges Biden to Sell U.S. Bitcoin Reserves to Cut Deficit Before Leaving Office
MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
