Powell Rules Out Bitcoin Reserves for the Fed Amid Legal Boundaries

Federal Reserve Chair Jerome Powell emphasized on Wednesday that the U.S. central bank has no intention or legal authority to hold significant amounts of bitcoin, distancing the institution from any potential government efforts to create a Strategic Bitcoin Reserve.

“We’re not allowed to own bitcoin,” Powell stated during a press conference following the Federal Open Market Committee meeting. The meeting concluded with a rate cut as expected, but policymakers left the door open for future adjustments to monetary policy.

Addressing questions about the possibility of central bank involvement in bitcoin holdings, Powell clarified that any legal considerations on the matter rest with Congress. “That’s the kind of thing for Congress to consider, but we are not seeking any change in the law at the Fed,” he said.

Powell’s remarks come amid speculation about how the government might approach digital assets as President-elect Donald Trump prepares to take office. His comments led to a drop in bitcoin’s value, which had surged following the election.

This reaffirmation of the Fed’s stance underscores its cautious approach to cryptocurrencies, highlighting the legal and institutional barriers to adopting digital assets as part of U.S. financial policy.