Jerome Powell Dismisses Possibility of Strategic Bitcoin Reserve

Federal
Reserve
Chairman,
Jerome
Powell,
recently
addressed
questions
concerning
the
possibility
of
a
Strategic
Bitcoin
Reserve
in
a
press
conference.
Despite
the
growing
popularity
and
acceptance
of
Bitcoin
and
other
cryptocurrencies,
Powell
clarified
that
current
laws
prohibit
the
Federal
Reserve
from
holding
Bitcoin.
Furthermore,
he
stated
that
there
is
no
intention
of
pushing
for
amendments
to
the
legislation
in
order
to
facilitate
a
Bitcoin
reserve.

The
concept
of
a
strategic
reserve
revolves
around
maintaining
a
stockpile
of
a
vital
resource,
ready
to
be
utilized
during
times
of
crisis
or
supply
disruption.
A
prime
example
of
such
a
repository
is
the
U.S.
Strategic
Petroleum
Reserve,
created
by
Congress
in
1975
following
the
Arab
oil
embargo
of
1973-74,
which
severely
disrupted
the
U.S.
economy.
This
reserve,
the
world’s
largest
emergency
supply
of
crude
oil,
has
been
tapped
into
during
wars
and
natural
disasters
to
stabilize
oil
markets.

However,
the
possibility
of
a
Bitcoin
equivalent
to
the
U.S.
Strategic
Petroleum
Reserve
has
been
met
with
mixed
responses
from
legal
experts
and
analysts.
There
is
debate
over
whether
former
President
Trump
could
have
used
executive
powers
to
establish
the
reserve,
or
if
such
an
action
would
require
an
act
of
Congress.
Some
proponents
argue
that
a
Bitcoin
reserve
could
be
created
via
an
executive
order
directing
the
U.S.
Treasury’s
Exchange
Stabilization
Fund,
which
has
the
power
to
purchase
or
sell
foreign
currencies
and
hold
Bitcoin.

The
reserve
could
potentially
include
Bitcoin
seized
from
criminal
activities,
which
is
estimated
to
be
around
200,000
tokens,
currently
valued
at
approximately
$21
billion.
In
his
July
speech,
Trump
suggested
this
stockpile
as
a
potential
starting
point
for
his
Bitcoin
reserve
plan.
However,
the
legal
procedure
for
transferring
these
Bitcoins
from
the
Department
of
Justice
remains
uncertain.

Trump
did
not
indicate
whether
the
government
would
supplement
this
stockpile
by
purchasing
additional
Bitcoin
in
the
open
market.
This
action
would
necessitate
government
borrowing.
However,
some
advocates
for
a
Bitcoin
reserve
suggest
another
possible
route
–
selling
a
portion
of
the
U.S.
gold
reserves
and
using
the
proceeds
to
purchase
Bitcoin.

It
needs
to
be
noted
that
this
article
does
not
provide
investment
advice,
and
is
purely
for
informational
purposes.
Whether
or
not
a
Bitcoin
strategic
reserve
could
become
a
reality
remains
to
be
seen.
The
concept
raises
interesting
questions
about
the
role
of
digital
currencies
in
the
future
of
national
economies
and
financial
stability.