Legal restrictions prevent the Fed from holding bitcoin, according to Qolzby.
Some states want local Bitcoin reserves; national unlikely by end of April.
Bitcoin's security, liquidity, and regulation remain debatable.
As discussions about a strategic Bitcoin reserve escalate in the United States, a Federal Reserve official is emphasizing legal restrictions on adding Bitcoin to its main paper.
On January 31, 2025, Chicago Fed President Austan Goolsbee explained the institution's legal limitations.
Legal Obstacles to Bitcoin Custody
Goolsbee noted that the Fed’s balance sheet is legally restricted. The legislation excludes bitcoin from reserve assets, he said.
This is consistent with the words of Federal Reserve Chairman Jerome Powell, who stressed that the Federal Reserve Act prohibits ownership of Bitcoin.
Paul also doubts the viability of Bitcoin’s store of value due to its volatility. He expressed his opinion in 2021.
Bitcoin does not qualify for asset paper at the Federal Reserve, which only allows specified assets.
Regulatory framework strengthened by Goolsbee’s explanation. The Fed has not yet included digital assets in its reserves.
The financial and cryptocurrency communities are following the controversy.
The Fed's confirmation sparked comments on X and financial news sources.
After the SEC abandoned the SAB-121 recommendations, banks began providing custody of Bitcoin.
The decision prompted a market response. Bitcoin subsequently rose slightly, indicating market confidence despite the US central bank’s restrictions.
Statistical evidence from recent market movements suggests that Bitcoin price volatility remains a major issue.
Bitcoin is sometimes likened to digital gold, but its price volatility is deterring cautious institutions, analysts say.
This shows the position of the US central bank. Reservations of the legal and regulatory structure prevent Bitcoin from entering the balance sheet.
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