US Treasury Secretary Says Treasury Lacks Authority to “Bail Out” Bitcoin
Washington, D.C., Feb. 4 — 2026 — Treasury Secretary Scott Bessent testified before the House Committee on Financial Services on Wednesday, fielding a pointed question from Rep. Brad Sherman (D‑CA) about whether the Treasury or the Federal Open Market Committee (FOMC) could intervene to support the price of Bitcoin (BTC) in a market downturn. Bessent responded unequivocally that neither the Treasury nor the Financial Stability Oversight Council (FSOC), which he chairs, possesses the statutory power to conduct such a “bail‑out” or to compel private banks to purchase additional cryptocurrency.
Background
The discussion took place amid ongoing debate over the United States’ “strategic Bitcoin reserve,” an initiative launched by President Donald Trump’s March 2025 executive order. The order authorises the Treasury to hold Bitcoin seized in law‑enforcement actions and to expand the reserve only through:
- Asset‑forfeiture acquisitions – Bitcoin obtained in criminal cases or civil forfeitures, and
- Budget‑neutral mechanisms – Conversions of existing government assets (e.g., petroleum, gold) to cryptocurrency without creating a new line‑item expense in the federal budget.
Since the order’s issuance, the Treasury’s seized Bitcoin holdings have grown dramatically. Valued at roughly $500 million when first acquired, the cache now exceeds $15 billion, according to Treasury data cited by Bessent.
Bessent’s Testimony
When asked if the Treasury could direct banks to buy “more BTC” or even “Trump Coin” – a tongue‑in‑cheek reference to meme‑coins associated with the former president – Bessent said:
“I am Secretary of the Treasury. I do not have the authority to do that, and as chair of the FSOC, I do not have that authority.”
He reiterated that the Treasury will retain the Bitcoin already in custody but will not engage in open‑market purchases or alter reserve‑requirement rules to stimulate banking‑sector demand for the digital asset.
Analysis
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Legal constraints are clear. The executive order explicitly bars the Treasury from spending new budgetary resources on Bitcoin purchases. Any acquisition must be funded by converting existing assets or through seizure, meaning the government cannot act as a price‑support mechanism in the way central banks intervene in fiat markets.
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Market impact is limited. While the Treasury’s holding of $15 billion of Bitcoin adds a sovereign‑level demand component, the inability to buy in the open market removes a potential catalyst for price stabilization during market stress. Analysts note that the mere existence of a strategic reserve may still influence market sentiment, but the effect will be muted compared with an active buying program.
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International signalling. Bitcoin advocate Samson Mow warned that the U.S. could be “front‑run” by other states seeking to establish their own strategic reserves. A neutral, non‑interventionist stance may encourage other governments to adopt more aggressive acquisition policies, potentially reshaping the global competitive landscape for state‑held crypto assets.
- Policy consistency. In August 2025, Bessent hinted the Treasury was exploring budget‑neutral acquisition routes, a position later tempered by his current clarification. This shift reflects the Treasury’s effort to stay within the legal framework while still evaluating ways to grow the reserve without exceeding budgetary limits.
Key Takeaways
- No bailout authority: Treasury Secretary Scott Bessent confirmed that neither the Treasury nor the FSOC can mandate banks to buy Bitcoin or intervene to prop up its price.
- Strategic reserve limits: The U.S. can only expand its Bitcoin holdings via asset seizures or budget‑neutral conversions of existing reserves, per the 2025 executive order.
- Seized assets now sizable: Bitcoin seized by law‑enforcement has risen from an estimated $500 million to over $15 billion in market value.
- Market influence modest: While the reserve signals governmental interest in crypto, the lack of open‑market purchasing limits any direct price‑support impact.
- Geopolitical implications: Other nations may view the U.S. approach as a baseline and could pursue more assertive strategies, potentially accelerating state‑level adoption of crypto assets.
The Treasury’s stance underscores a formal separation between sovereign asset management and market stabilization, a delineation that will shape the evolution of the United States’ digital‑asset policy in the years ahead.
Source: https://cointelegraph.com/news/us-treasury-bessent-wont-bail-out-bitcoin?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
