Federal Reserve Chairman Jerome Powell opposes Trump's Bitcoin strategic reserve plan, stating that the Federal Reserve cannot hold Bitcoin, which led to a drop in Bitcoin's price to $96,000. Powell indicated that the Federal Reserve is not seeking legislative changes to allow the holding of Bitcoin, and any policy change would require congressional action. Under the Trump administration, Senator Cynthia Lummis promoted a Bitcoin bill proposing the establishment of a U.S. strategic Bitcoin reserve, aiming to purchase 5% of the total supply over five years. The U.S. government currently holds a substantial amount of Bitcoin seized through criminal cases, valued at approximately $20.70 billion. Trump reiterated his strategic reserve plan, emphasizing the need for the U.S. to lead in the cryptocurrency space.

U.S. Federal Reserve Chairman Jerome Powell clarified Wednesday that the Fed is not allowed to own Bitcoin (BTC), aligning with the Federal Reserve Act. Powell indicated no intention to pursue changes to this legislation amid a promise by President-elect Donald Trump to establish a national strategic Bitcoin reserve.The price of Bitcoin sank below the $100,000 mark following Powell’s comments against forming a national Bitcoin reserve. BTC dropped some more today to a current price of $96,847, just two days after rising to its new all-time high above $108,000. The leading cryptocurrency is now down 6.2% on the day amid a crypto bloodbath, according toCoinGeckodata.Bitcoin Ownership Prohibited For The FedFed’s Jerome Powell has dismissed speculations about the U.S central bank’s potential involvement in building a national Bitcoin reserve, citing legal restrictions prohibiting it from owning the world’s largest crypto.Powell noted that the Federal Reserve is not looking for legislative amendments to allow BTC ownership, adding that any potential changes to this policy would require Congressional action.“The Federal Reserve Act says what we can own, and we’re not looking for a law change. That’s the kind of thing for Congress to consider, but we are not looking for a law change at the Fed,” Powell stated.Bitcoin Reserve Under Trump’s AdministrationFormer U.S. President Donald Trump’s win against Kamala Harris in the November Presidential election has bolstered optimism for more pro-crypto policies. One of the most highly awaited bills is the Bitcoin Act, championed by Wyoming Republican Senator Cynthia Lummis, whichproposesthe establishment of a strategic Bitcoin stockpile for the US.If passed, the bill would direct the U.S. Treasury to buy 5% of the total Bitcoin supply — 1 million Bitcoins — over five years to be held for 20 years.Interestingly, the U.S. government already holds billions of dollars worth of Bitcoin confiscated via criminal cases. This puts considerable Bitcoin reserves under government custody.According to Arkham Intelligence, the U.S. government currently holds roughly $20.7 billion worth of Bitcoin, along with other crypto assets. It’s unclear whether these funds will be incorporated into the proposed U.S. strategic reserve.Trump recently doubled down on his strategic reserve plan last week,saying, “We’re gonna do something great with crypto, ‘cause we don’t want China, or anybody else, not just China, others are embracing it, and we want to be the head.”But whether Lummis’ legislation will garner widespread backing within Congress is anyone’s guess.

Powell opposes Trump's Bitcoin reserve plan, Bitcoin drops to $96,000