U.S. Treasury Secretary Scott Bessent told lawmakers this week that the federal government lacks the legal authority to bail out Bitcoin or direct banks to purchase cryptocurrencies.
Summary
- U.S. Treasury Secretary Scott Bessent said the federal government has no legal authority to bail out Bitcoin or compel banks to buy cryptocurrencies, ruling out taxpayer-funded intervention during market downturns.
- Lawmakers also pressed Bessent on World Liberty Financial, a Trump-linked crypto venture, with Democrats urging heightened scrutiny of any banking applications tied to potential conflicts of interest or foreign influence.
- The testimony comes as Bitcoin slid nearly 8% in 24 hours, hitting its lowest level since early November 2024 amid broader market uncertainty and risk-off sentiment.
His remarks emphasized the limits of government intervention as digital assets face renewed market pressure.
U.S. Treasury rules out Bitcoin bailout
During a House Financial Services Committee hearing, California Representative Brad Sherman pressed Bessent on whether the Treasury Department or the Financial Stability Oversight Council (FSOC) could use taxpayer funds to support Bitcoin (BTC) during a downturn.
Bessent replied unequivocally that neither he nor the council holds that authority.
“I am Secretary of the Treasury, I do not have the authority to do that, and as chair of FSOC, I do not have that authority,” Bessent said.
Bessent’s testimony clarified that while the U.S. government may retain Bitcoin obtained through legal forfeitures, it cannot mandate banks to buy Bitcoin or invest U.S. tax dollars in cryptocurrencies. Thus, effectively ruled out bailout scenarios reminiscent of those seen in past financial crises.
Bessent also mentioned that the $500 million in seized Bitcoin held by the US government has surged to over $15 billion while in custody.
The Treasury Secretary additionally faced pointed questions about World Liberty Financial, a crypto and decentralized finance venture tied to President Donald Trump.
Representative Gregory Meeks demanded that Bessent commit to pausing and intensifying scrutiny of any bank charter or license application tied to World Liberty Financial until conflicts of interest and potential foreign influence are fully reviewed and shared with Congress.
Bessent declined, noting that the Office of the Comptroller of the Currency (OCC), the agency that would approve banking charters, is an independent regulator and not under Treasury control.
Bitcoin’s price slide deepens amid market uncertainty
The remarks came amid a sharp sell-off in the cryptocurrency market. Bitcoin’s price has fallen nearly 8% in the last 24 hours, dragging the world’s largest cryptocurrency to its lowest level since early November 2024 as investor sentiment turns cautious.
Broader market stress, including macroeconomic concerns and shifting risk appetites, has compounded selling pressure.
