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Does the Federal Reserve Have The Power To Block The Bitcoin Reserve Plan?
In a recent press conference following the monetary policy meeting, Fed Chair Jerome Powell made it clear that the Federal Reserve has no intention of participating in any government plan to accumulate Bitcoin. Furthermore, he emphasized that such matters fall under the jurisdiction of Congress and the Fed does not wish to seek a change in existing laws to allow for Bitcoin holdings.
Powell’s statement led to an immediate market pullback, with Bitcoin’s price dropping from its earlier highs on the day of the press conference. Additionally, the probability of a Bitcoin Strategic Reserve (BSR) dropped significantly, plummeting from 40% to 34%, as reported by the Polymarket platform.
So, does the Federal Reserve have the power to block the Bitcoin reserve plan? The answer lies in understanding the jurisdictional boundaries between the Federal Reserve and Congress.
The U.S. Congress is the highest authority in the financial system, responsible for enacting laws and regulations governing monetary policy, including those related to central banks like the Federal Reserve. In contrast, the Federal Reserve’s primary responsibility lies in implementing monetary policy, as directed by Congress.
Given this structural arrangement, it becomes clear that the Federal Reserve does not possess the authority to block a Bitcoin reserve plan initiated by the government or any other agency. Any such initiative would need to be approved and implemented through legislative means, involving both the House of Representatives and the Senate.
Despite Powell’s cautious approach towards a potential BSR, his statement did not outright reject the proposal for a Bitcoin reserve. The Trump administration has shown support for innovation in the market, indicating a subtle struggle between traditional power structures and emerging market forces.
In conclusion, while the Federal Reserve may not have the authority to block a Bitcoin reserve plan, the proposal’s fate ultimately rests with Congress, as it requires legislative approval.
Source: coinpedia.org
