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Fed Rejects Bitcoin Reserve, States Push Ahead

Coin WorldThursday, Feb 6, 2025 7:38 pm ET

1min read

The Federal Reserve has rejected a proposal for a strategic Bitcoin reserve, according to Federal Reserve Governor Waller. In a recent address, Waller clarified the central bank's stance on cryptocurrencies, particularly Bitcoin, stating that the Fed will not operate such a project. This statement reflects the Federal Reserve's cautious approach towards digital currencies, emphasizing the bank's commitment to traditional monetary policy frameworks.

The suggestion of a Bitcoin reserve highlights growing interest in digital asset integration within established financial systems. However, Waller's remarks reinforce the importance of regulatory clarity and the potential risks associated with cryptocurrencies. As the dialogue around digital assets evolves, it remains essential for investors to stay informed about the implications of such developments on market stability and monetary policy.

Meanwhile, the movement for Bitcoin reserves at the state level has gained momentum in the United States. New Mexico has joined the list of states exploring the possibility of deploying a portion of public funds to buy Bitcoin. The New Mexico Reserve bill, introduced by Senator Anthony Thornton, would allow the state to invest 5% of public funds in BTC. The bill is currently pending review by the Senate Taxation, Business, and Transportation Committee (STBTC).

Other states, such as Wyoming, led by Senator Cynthia Lummis, have also made progress with BTC Reserve plans. If approved, the state would invest about $300M in BTC to diversify its reserve investments. According to Bitcoin Laws, a tracker for BTC Reserve legislation, 15 states have seen some progress in BTC Reserve bills. However, most bills are still at the introduction or committee's first reading stages, and none have been enacted yet.

While the national level discussion on a Bitcoin reserve is ongoing, President Trump has instructed his crypto czar, David Sacks, to evaluate the idea of a BTC Reserve. The working group has been given 180 days to submit a framework for a 'national digital stockpile.' However, the timeline for a national BTC Reserve remains uncertain, with Polymarket odds for the national BTC Reserve in 2025 below 50%.

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