Bitcoin Reserve Plan Called ‘The Dumbest Idea Ever’ By Fed, Expert Unveils

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In a fascinating disclosure on the most recent episode of Coin Stories podcast, host Nathalie Brunell talked to Perianne Boring, CEO of The Digital Chamber. During their conversation, Boring revealed an unpublicized reaction from members of the U.S Federal Reserve, stating that one official called the idea of a US Strategic Bitcoin Reserve “the most foolish concept” they had ever heard during a meeting with officials at the Board of Governors of the Federal Reserve System.

Last week, Boring described the palpable tension in the Federal Reserve’s boardroom. “When I proposed my suggestion,” she said, “I had never witnessed a response quite like the one that unfolded around that table. The individuals at the FED were swearing, expressing their disbelief, claiming it was the most foolish idea they’d ever encountered. According to her account, there was no strategic merit in Bitcoin.

She mentioned that they had come close to being evicted from the room, as the Board of Governors of the Federal Reserve strongly disapproved of their proposal and found it audacious for them even to entertain such an idea within the premises of the Federal Reserve. She further stated that the Trump campaign’s pledge to establish a national Bitcoin stockpile would likely spark debate and resistance.

Brunell wondered if this resistance was rooted in a “difference in knowledge and learning” or a strong desire to maintain existing systems. In response, Boring suggested it could be a blend of both factors. At present, the Federal Reserve controls the issuance of money. However, she proposed that integrating Bitcoin (BTC) might even reinforce this control, as it could potentially bolster the value of the US dollar or Treasury bonds by backing them with Bitcoin.

In my opinion, currently the Federal Reserve controls the money supply and it’s beneficial for them to maintain this monopoly. However, I believe Bitcoin could help sustain this monopoly in an innovative way. This could be achieved by incorporating Bitcoin into the US balance sheet, or backing the US dollar with Bitcoin, or even by having US Treasury bonds backed by Bitcoin.

Will This Stop Trump’s Bitcoin Stockpile Plans?

Brunell highlighted Trump’s and his family’s recent comments, such as Eric Trump’s speech at the Bitcoin conference in Abu Dhabi, indicating that if elected President, Trump could indeed act upon his promises. Remarkably, it appears he might utilize a “crypto credit card” or even eliminate capital gains tax on Bitcoin to potentially pay off some portion of the national debt.

When asked about possible methods for Donald Trump to fulfill his supportive views on Bitcoin, Boring clarified: “Well, there are several routes to take. In essence, what candidate Trump pledged was the creation of a strategic reserve of Bitcoins.

Trump’s proposed plan is to seize control over the approximately 208,000 Bitcoins owned by the U.S. government, primarily managed by entities such as the US Marshals Service and the Department of Justice. The intention behind this move is to shift these Bitcoins from law enforcement agencies to the Treasury’s balance sheet, thereby preventing them from being used or moved for other purposes. This action aims to keep the Bitcoin out of law enforcement’s hands and place it under the control of the U.S. Treasury.

Following Trump’s proposal at a Bitcoin conference in Nashville, Senator Cynthia Lummis presented the Bitcoin Act, aiming to establish a more substantial Strategic Bitcoin Reserve by acquiring an extra 1 million BTC. Meanwhile, Robert F. Kennedy Jr. has put forward an even more aggressive plan of 4 million BTC, causing Boring to remark: “Things are looking increasingly optimistic and bullish very quickly.

In discussing the technical aspects, Boring pointed out that “the President of the United States possesses substantial executive powers” to carry out at least the initial stage of the plan—specifically, consolidating the current government-held Bitcoin under a new reserve. She elaborated that while a congressional act is usually needed for major expenditures like purchasing additional Bitcoin, there are several areas where the executive branch can draw funding from. “If there’s a will, there’s a way,” Boring stated. “I believe President-elect Trump intends to fulfill this promise to our community and I don’t think any obstacles stand in his way.

Inquired about whether she thought the US would hold more Bitcoin within a year, Boring chose not to provide a specific forecast, but underscored the importance of established authorities and strong guidance: “The driving force behind this […] is leadership… What’s essential is having someone at the top who […] is prepared to pursue a daring objective.

At press time, BTC traded at $95,722.

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2025-01-08 22:11