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@uclm

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@uclm
One social security issue
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@uclm
In short, the Fed’s emergency powers under Section 13(3), combined with the precedent of purchasing ETFs during times of need, provide the legal justification for the inclusion of Bitcoin ETFs in its portfolio.
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By acquiring Bitcoin ETFs, the Fed could hedge against systemic instability within traditional markets, ensuring its ability to fulfill its mandate of financial stability and monetary policy effectiveness.
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The Fed’s balance sheet remains heavily exposed to correlated risks from Treasuries and mortgage-backed securities.
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While Bitcoin ETFs are not currently systemically important, their low correlation to traditional financial assets provides a compelling case for their inclusion.
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More importantly, the precedent set by the Fed’s inclusion of bond ETFs in its crisis programs underscores that ETFs representing broader asset classes—especially those crucial to maintaining financial stability—can be integrated into the Fed’s portfolio.
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#Bitcoin ETFs, which are SEC-regulated and traded on established markets, fit within the legal scope of assets that can be targeted during financial interventions.
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This established a clear precedent for the Fed’s ability to acquire regulated financial instruments, such as ETFs, when doing so aligns with its mandate.
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In these instances, the Fed utilized emergency lending facilities to purchase novel asset classes, including corporate bonds and exchange-traded funds (ETFs), to maintain liquidity and economic stability.
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as demonstrated during the 2008 Financial Crisis and the 2020 COVID-19 pandemic
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Under Section 13(3) of the Federal Reserve Act, the Federal Reserve has the authority to take “unusual and exigent” actions to stabilize the financial system
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