Fed Sheds Light on Bitcoin Strategic Reserve Rules: “We’re Not Allowed”

The Federal Reserve (Fed) has shed light on the rules in place in the US for a strategic reserve of Bitcoin , highlighting that he is not allowed to hold the largest cryptocurrency. The statement was made by Fed Chairman Jerome Powell during a interview press conference on December 18th.

According to Powell, the U.S. central bank “is not allowed to hold Bitcoin” and is “not seeking legislative changes” to enable it. The Fed chairman clarified in his statement that under the Federal Reserve Act, there are rules governing what a bank can hold, and Bitcoin is not one of those permitted assets.

Recently, the United States, led by newly re-elected President Donald Trump, confirmed its plans to establish a substantial reserve of Bitcoin, in a clear attempt at global economic leadership.

However, the US government's plan to establish a strategic Bitcoin reserve is up to the US Congress and not the Fed. In this sense, Powell stressed that decisions on this issue should be made by lawmakers.

It is worth remembering that the Financial Accounting Standards Board (FASB) announced a significant change in the way US companies account for Bitcoin and other cryptocurrencies. Starting in 2025, companies will be able to value their Bitcoin holdings based on the current market price, ensuring greater transparency and accuracy in financial reporting. This development coincides with comments by US President-elect Donald Trump that he has hinted at the possibility of creating a strategic Bitcoin reserve, similar to oil reserves.

BTC price drops after Powell’s statements

O Bitcoin price today 19/12/2024 is showing a significant drop of more than 2% that made the asset return to the $102 zone. Yesterday, the asset and the cryptocurrency market began a sharp decline in the face of comments made by Federal Reserve Chairman Jerome Powell.

Powell announced interest rate adjustments on Dec. 18 and made cautious comments about the economic future. The revelation not only sent the U.S. stock market tumbling, but also had a direct impact on cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin. Following a 25 basis point interest rate cut announced on Wednesday, Bitcoin saw a significant drop, dropping nearly 5%. Prior to the Fed’s press conference, the leading cryptocurrency had hit a new all-time high above $108.000, but quickly retreated to $100.400.

At the time of publication, the price of Bitcoin was quoted at US$101.990, down 2.9% in the last 24 hours.