In a statement that reaffirms the Federal Reserve’s position on cryptocurrencies, Chair Jerome Powell clarified that the Fed is “not allowed to own Bitcoin”. Speaking during a recent discussion on monetary policy and digital currencies, Powell highlighted the limitations placed on the central bank regarding its ability to interact with decentralized assets like Bitcoin.
“The Federal Reserve operates under a strict regulatory framework,” Powell stated. “We are authorized to deal with government-issued currencies and related instruments, but we are not permitted to hold or trade cryptocurrencies such as Bitcoin.”
The clarification comes at a time when cryptocurrencies, particularly Bitcoin, continue to grow in popularity as alternative assets. Despite the increasing institutional adoption of digital assets, Powell’s remarks underline the Federal Reserve’s cautious stance toward decentralized financial instruments.
Powell also touched on the Fed’s ongoing exploration of a Central Bank Digital Currency (CBDC), emphasizing that this effort is entirely separate from existing cryptocurrencies. “A CBDC, if developed, would be a government-issued digital dollar, fully regulated and under central control. Bitcoin and other cryptocurrencies, on the other hand, operate on decentralized networks and are beyond the scope of central bank authority,” he added.
The statement serves as a reminder of the Federal Reserve’s primary focus: maintaining monetary stability and supporting the U.S. economy through traditional policy tools. Cryptocurrencies, while innovative, do not align with the Fed’s mandate and remain outside its operational purview.
As the cryptocurrency market continues to evolve, Powell’s comments highlight the ongoing divide between decentralized digital assets and the traditional financial system. While Bitcoin advocates push for broader acceptance, regulatory bodies like the Fed remain cautious, prioritizing control and stability over experimentation with unregulated assets.
Stay tuned for further updates as policymakers and financial leaders navigate the ever-changing dynamics of the cryptocurrency landscape.
