Fed Chairman Powell drew attention with his statement on Bitcoin.

The Chairman of the Federal Reserve, Jerome Powell, announced that the Federal Reserve cannot own Bitcoin due to current legal restrictions. In response to Donald Trump's proposal to establish a strategic Bitcoin reserve, Powell stated that they are not seeking a change in the law.

Powell's Statement on Cryptocurrency: Fed Cannot Own Bitcoin

Fed Chairman Jerome Powell highlighted the legal barriers regarding the national Bitcoin reserve proposal brought up by Donald Trump. During a press conference following the Fed's interest rate decision, Powell emphasized that the current legal framework does not allow the Fed to hold cryptocurrency assets.

Before the presidential elections in November, Trump argued in a statement that the U.S. should be a leader in the cryptocurrency space. He specifically mentioned China's advancements in this area, stating that the U.S. should not fall behind.

Legal initiatives related to the issue are also gaining momentum. A bill introduced by Wyoming Senator Cynthia Lummis in Congress envisions the Treasury acquiring one million Bitcoins over a five-year period. In Pennsylvania, Republican lawmakers have presented a bill to the assembly that would pave the way for the state treasury to invest in digital assets.

Meanwhile, former New York Fed President Bill Dudley warned in an article published last week that a potential national Bitcoin reserve could pose risks to the American public.

Powell's statements during the press conference following the Fed's announcement of a 25 basis point interest rate cut affected cryptocurrency markets. The value of Bitcoin fell by 5%, dropping to $100,500. Grayscale Research Director Zach Pandl noted that the markets may have exaggerated the expectations for a national reserve, stating that an increase in cryptocurrency investments from sovereign funds in Asia and the Middle East is expected in the near future.