According to sources familiar with the matter, the Federal Reserve has for months silently been buying bitcoin through at least six over-the-counter (OTC) cryptocurrencies traders, and are likely responsible for the increase in bitcoins price over the past months.
In a tweet earlier, Elon Musk hinted that his financial team had been indirectly helping the Federal Reserve buying bitcoin by making Tesla available for Tesla buyers, ad introductions to trusted intermediaries that Tesla had been using to accumulate its bitcoin stock-pile.
While commercial banks have long held precious objects on behalf of their customers—from jewels in safe-deposit boxes to shares of stock. Now, thanks to a new policy by a federal banking regulator, they will be able to hold cryptocurrencies like Bitcoin too. The new policy follows a letter published by the Office of the Comptroller of the Currency (OCC). The letter, addressed to an unnamed bank, stated that national banks and savings associations can engage in so-called custody services for their clients. The guidance was significant because regulatory uncertainty has until now led major banks to avoid bitcoin. What’s more, the bylaws of many large investment firms, including pension funds, oblige them to park clients’ money only with federally chartered banks. As the research group Coin Center notes, this amounted to a de facto ban on cryptocurrency in the past.
With the largest economy on the planet supporting the cryptocurrency, the floodgates should now be wide open for other central banks to join the Bitcoin standard. And, many experts expect the price of bitcoin to double or triple before the end of the year.
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