Fed Official Shares His Take on Bitcoin Reserve

Austan Goolsbee, the president of the Federal Reserve Bank of Chicago, has stated that the Fed is legally limited about what it can actually put on its balance sheet. 

Earlier, Chair Jerome Powell stated that the Fed was actually legally prohibited from holding Bitcoin by the Federal Reserve Act, and the institution is not interested in a law change. 

Back in 2021, Powell opined that Bitcoin was not a viable store of value due to its excessive volatility. 

During his most recent press conference, however, the Fed chair stated that banks could provide cryptocurrency custody services after the SEC dropped the controversial SAB-121 guidance. The cryptocurrency community reacted positively to this statement, with Bitcoin spiking higher following his remarks. 

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Last month, Powell stated that Bitcoin was a digital version of gold, seemingly picking up the narrative of the cryptocurrency’s ardent supporters. 

A Bitcoin reserve? Not so fast 

In the meantime, the probability of a Bitcoin reserve being created by the end of April has now plunged to just 16%. For comparison, 

Still, the majority of bettors expect the strategic reserve to eventually happen this year. 

As reported by U.Today, there are also several state-level initiatives to create local Bitcoin reserves in such states as Texas, Florida, and Ohio. It remains to be seen how many of them will succeed. 

Cynthia Lummis of Wyoming, who originally proposed to make the U.S. Treasury buy Bitcoin last year, recently stated that the creation of the reserve will be her priority as the head of a new Senate subcommittee focused on digital assets.