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Does the Federal Reserve Have The Power To Block The Bitcoin Reserve Plan?

Author: Content Editor
The Federal Reserve (Fed) has stated that it does not intend to participate in any government plan to accumulate Bitcoin, stating that such matters are under the jurisdiction of Congress. Fed Chair Jerome Powell's statement caused Bitcoin's price to pull back from its recent high. The possibility of a Bitcoin Strategic Reserve also dropped after Powell's speech. The Trump administration could potentially establish a Bitcoin reserve through an executive order utilizing the Exchange Stabilization Fund (ESF), bypassing the need for congressional approval, although the sustainability of this approach is uncertain. A more stable option would be to incorporate Bitcoin into legislation such as the "U.S. Bitcoin Strategic Reserve Act," currently under review by the Senate Banking Committee, although this would be a lengthier process. The Treasury Department, not the Fed, would ultimately take the lead in implementing the Bitcoin reserve. The Federal Reserve could purchase Bitcoin through open market operations, but this seems unlikely based on recent statements. The Treasury Department could establish a special fund with congressional approval to invest in Bitcoin. The Fed's position does not outrightly reject the proposal for a Bitcoin Strategic Reserve, and the Trump administration has shown support.

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