It could happen, but its unlikely to play out how "we" would like it to. I agree, I think he likes the dollar and how it empowers the US in the world, and he doesn't want to change that.

If I was the FED, the only way I would allow this is if I was able to shape the narrative around Bitcoin and guide it towards not being a competitor to my product.

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Isn't that up to Congress to decide, at least on the face of it? (Re: the FED)