Trump explores bypassing the FED for Bitcoin strategic reserve
President Elected Donald Trump
President Elected Donald Trump is reportedly exploring a controversial path to establish a U.S. Bitcoin Strategic Reserve without the Federal Reserve’s approval.
During a recent press conference, Federal Reserve Chairman Jerome Powell firmly rejected the notion of the Fed adopting Bitcoin, stating: “The Fed is not the place for Bitcoin”, according to the Cryptopolitan.
The Treasury Option: An Executive Workaround
Trump may bypass Powell entirely by turning to the Treasury Department’s Exchange Stabilization Fund (ESF). This fund, created to stabilize the U.S. dollar during financial crises, operates independently of the Federal Reserve and does not require congressional oversight.
Experts suggest Trump could issue an executive order directing the Treasury to allocate the ESF toward purchasing Bitcoin. This move would allow him to sidestep Congress and the Fed, though such an order could be reversed by a future administration.
Alternatively, Trump could pursue legislation. Senator Cynthia Lummis has introduced the “U.S. Bitcoin Strategic Reserve Act,” which would formalize Bitcoin as a strategic national asset. However, the legislative route faces significant hurdles, including slow processes and a lack of bipartisan consensus on cryptocurrencies.
The idea of a Bitcoin Strategic Reserve represents a bold shift in U.S. monetary policy, reflecting the growing influence of digital assets. While Powell’s opposition underscores central banks’ hesitation, Trump’s potential action could position the U.S. as a leader in cryptocurrency adoption.
The debate highlights the clash between traditional financial systems and the disruptive potential of blockchain technology. Whether pursued through executive action or legislation, this initiative could reshape the global financial landscape.
Bitcoin hit a record high of $106,000 on Monday, driven by market optimism over pro-crypto policies from President-elect Donald Trump. The milestone reflects a 10% year-to-date gain, surpassing its previous high of $103,700 earlier this month.
