Fed’s ‘Third Mandate’ Could Weaken Dollar and Boost Bitcoin

The “third mandate” by the U.S. Federal Reserve has resurfaced in policy debates. The overlooked mandate has been sidelined for some time and has resurfaced, igniting concerns about the future of the U.S. dollar and optimism for the crypto sector.

Traditionally, the Fed has been guided by its dual mandate: maintaining price stability and ensuring maximum employment. But earlier this month, Stephen Miran, President Donald Trump’s nominee for Fed governor, pointed to a forgotten statutory clause requiring the central bank to also pursue “moderate long-term interest rates.”

The “Third Mandate” Could Bring Change to the Crypto Market

According to Bloomberg, Trump officials are preparing to leverage this mandate as legal justification for aggressive market interventions, including yield curve control and expanded quantitative easing. Such policies could involve the Fed buying government bonds to suppress long-term borrowing costs, a move that would lower Treasury yields and mortgage rates while easing pressure on the federal government’s record $37.5 trillion debt.

The push for lower interest rates has long been a theme of Trump’s economic agenda. He frequently criticized Fed Chair Jerome Powell for being “too slow” in reducing rates and has openly supported policies that stimulate borrowing and housing markets. Tools under consideration reportedly include increased Treasury bill issuance, bond buybacks, and large-scale money printing.

Analysts warn that tighter control over the bond market may come at a cost. Christian Pusateri, founder of encryption protocol Mind Network, called the approach “financial repression by another name,” adding that it reflects deep imbalances between debt and GDP.

Crypto advocates, however, see opportunity. As confidence in the dollar weakens, digital assets like Bitcoin could attract significant inflows. “Bitcoin stands to absorb massive capital as the preferred hedge against the global financial system,” Pusateri said.

Arthur Hayes, outspoken co-founder of crypto exchange BitMEX, went even further, suggesting that a full embrace of yield curve control could propel Bitcoin’s price to $1 million.

If enacted, the third mandate could mark a historic shift in U.S. monetary policy. For now, the debate underscores a widening divide: while traditional markets worry about the dollar’s erosion, the crypto community is already eyeing a new wave of adoption and capital inflows.