Bitcoin achieves real-time public verification of all transaction records through its open-source ledger technology; meanwhile, the 112-year-old Federal Reserve, despite regularly publishing reports, has never undergone a comprehensive audit.
Key details such as its emergency lending programs and foreign exchange swap operations have long been kept from public view. Why is that?
This featured content is translated by Finance Run • Web3.0 Research Lab from Ankish Jain's "Why 16-year-old Bitcoin has an audit trail while the 112-year-old Fed does not."
By comparing their audit mechanisms, market impact, and regulatory efficiency, the article reveals the fundamental differences in transparency paradigms between central banking and digital currency, and analyzes the practical effects of this disparity on investors, policymakers, and the global financial system.
Bitcoin’s Self-Auditing Mechanism
Bitcoin is often described as a peer-to-peer digital currency, but one of its most underrated features is its self-auditing capability. The network confirms a new block every 10 minutes through the proof-of-work mechanism, validated by thousands of independent nodes worldwide.
Since January 2009, it has formed a continuous public record spanning over 900,000 blocks and containing nearly 12 billion transactions. Anyone with an internet connection can permissionlessly verify the data in real time.
In contrast, the 112-year-old Federal Reserve, which serves as the pillar of the U.S. financial system—managing interest rates, money supply, and economic stability—has never undergone a fully independent audit.
It regularly releases policy meeting minutes, balance sheets, and financial statements, but core operations such as emergency lending details, foreign exchange swap lines, and dealings with private banks remain shielded from external scrutiny.
The contrast is dramatic: 16-year-old Bitcoin has a fully public financial trail, while the century-old institution controlling the world’s largest economy has consistently avoided the same level of examination.
Bitcoin’s Self-Verification Logic
Bitcoin’s continuous auditability is a natural product of its open-source design.
All network participants have equal rights to verify the rules, breaking down the inherent information hierarchy in banking—where insiders enjoy privileged access, and the public only receives what regulators disclose.
The concept of full nodes is central to the system’s operation; they act as independent referees. Nodes require no special permission or political approval—anyone can run one using consumer-grade hardware and obtain a complete copy of the ledger. This "don’t trust, verify" principle ensures that the 21 million Bitcoin supply cap is enforced without relying on trust in any central authority.
Each newly mined block contains a fixed amount of newly created Bitcoin, reduced approximately every four years through a "halving" mechanism. From the initial reward of 50 BTC per block in 2009 to 3.125 BTC after the April 2024 halving, every unit of currency in circulation can be traced back to its birth block.
Blockchain analytics firms like Chainalysis, Elliptic, and Glassnode have built entire business models around Bitcoin’s public ledger. Regulators also leverage the network’s transparency to track criminal activities, such as the U.S. Department of Justice’s successful recovery of 63.7 Bitcoin paid in the Colonial Pipeline ransomware attack in 2021 by tracing blockchain wallet addresses.
The reliability of this audit stems not only from transparency but also from redundancy. Copies of the Bitcoin ledger are distributed across multiple regions in Europe, Asia, and the Americas. Even if a local government shuts down an exchange or data center, the data remains accessible elsewhere, ensuring the audit process is continuous and censorship-resistant.
The Federal Reserve’s Global Role
The Federal Reserve holds a unique position in global finance. Although it only sets U.S. monetary policy, its influence extends far beyond national borders. According to IMF data, the U.S. dollar accounts for about 58% of global foreign exchange reserves, and nearly 90% of global trade transactions use the dollar in some form.
Given this influence, the Fed’s transparency is not just a domestic issue but also a matter of international concern. The institution regularly publishes its weekly H.4.1 balance sheet, the Beige Book on economic conditions, and detailed Federal Open Market Committee meeting minutes. It also releases annually audited financial statements disclosing assets, liabilities, and income.
However, these disclosures only scratch the surface of its operations. The central bank’s most powerful tools remain outside independent review.
Take the emergency lending programs, for example: during the 2008 financial crisis, the Fed created facilities to lend trillions of dollars to domestic and foreign banks. The Levy Economics Institute later estimated that the cumulative support across these programs exceeded $29 trillion. But details of these interventions were only revealed years later due to lawsuits and congressional pressure.
Similar secrecy surrounds the Fed’s extensive use of foreign exchange swap lines—a tool that allows foreign central banks to borrow U.S. dollars during global liquidity crunches.
Calls for greater transparency have persisted. Representative Ron Paul introduced the "Audit the Fed" bill in 2009, which passed the House but was significantly diluted before becoming law. Senator Rand Paul renewed the effort in 2015 but again faced defeat in the Senate.
The Fed has consistently opposed these attempts, with officials arguing that full transparency could politicize its decisions and undermine independence. Former Chairman Ben Bernanke warned in 2010 that auditing monetary policy deliberations could "seriously threaten the independence of monetary policy and the stability of the financial system."
This has led to what some economists call "selective transparency": the Fed discloses enough information to maintain market credibility but keeps the most sensitive details hidden from public view.
Implications of the Transparency Gap
The transparency disparity between Bitcoin and the Fed affects markets, regulation, and public accountability in three key ways:
First, in terms of market behavior.
Glassnode data shows that in 2023, Bitcoin held for more than one year accounted for over 68% of the circulating supply—a metric used to gauge long-term investor conviction. Unlike Bitcoin, where on-chain data directly reflects holder behavior, the U.S. dollar supply lacks comparable statistics—central bank disclosures focus on macro aggregates rather than individual actions.
The Fed instead creates a reverse mechanism:
It communicates monetary policy through announcements and press conferences, and market participants react to guidance rather than verifiable data.
Traders rely quarterly on the dot plot to interpret interest rate prospects, even though these are only committee views rather than firm commitments. The gap between expectations and reality can trigger trillions of dollars in global market fluctuations within minutes, highlighting the weight of selective communication versus direct visibility.
The regulatory sphere similarly reflects contrasting values. Bitcoin’s fully open ledger enables global regulators to achieve compliance through blockchain analytics.
Chainalysis reported that in 2023, U.S. authorities seized $3.4 billion in Bitcoin related to criminal cases through on-chain tracing. In contrast, the Fed’s dealings with troubled institutions during crises—such as the 2019 overnight repo market intervention—were initially entirely opaque; only aggregate amounts were disclosed, and the identities of borrowing banks remained confidential.
The credibility gap also affects international relations. Countries heavily reliant on the dollar for trade or reserves must accept Fed decisions without full knowledge of its overall strategy, fueling interest in alternatives.
According to the Atlantic Council’s 2025 Central Bank Digital Currency Tracker, the BRICS group is discussing reducing dollar dependence, and over 130 central banks are experimenting with digital currencies.
The transparency gap matters because it reshapes perceptions of financial fairness. Both models have their merits, but as digital systems redefine standards of financial accountability, this contrast is becoming increasingly stark.
