A former Fed president is warning that the proposed Bitcoin ( BTC ) strategic reserve concept won’t yield any positive benefits for the American people. Bill Dudley, former president of the Federal Reserve Bank of New York and ex-vice chair of the Federal Open Market Committee (FOMC), says in a new opinion piece on Bloomberg that the incoming Trump administration’s proposal for a BTC-backed reserve has zero positives. Dudley says the main effect of a Bitcoin reserve would be higher inflation and more national debt. “But what benefit does establishing a Bitcoin reserve have for the government or those who do not hold Bitcoin? None. There is no exit strategy, so its purpose is to drive up inflation rather than create value for the government – the government would be forced to hold a volatile token that generates no revenue. To provide the funds for purchases, the Treasury must either borrow (thus increasing debt service costs) or the Federal Reserve must create money (thus exacerbating inflation). The latter is almost indistinguishable from the Federal Reserve monetizing US government debt (similarly, directing the Federal Reserve to utilize the government’s gold reserves based on congressional legislative proposals would also be the case).” The former Fed boss says that if the Trump administration really wants to support Bitcoin and the crypto industry, it should establish laws and regulations that “allow it to develop and operate safely.” Specifically, Dudley says that the government should work to define whether tokens are currency or securities, and establish rules to “protect consumers and prohibit their use for activities such as financing terrorism or selling illegal drugs.” Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox Check Price Action Follow us on X , Facebook and Telegram Surf The Daily Hodl Mix Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing. Generated Image: Midjourney The post Former New York Fed President Says Strategic Bitcoin Reserve Would Drive Up Inflation and Government Debt appeared first on The Daily Hodl .
