In a groundbreaking move, President Donald Trump has signed an executive order to create a strategic reserve for Bitcoin, positioning the United States as one of the few nations globally to establish a national stockpile of blockchain assets. This innovative reserve will primarily consist of cryptocurrency seized by the federal government during criminal or civil proceedings. The announcement was made by White House AI and crypto advisor, David Sacks, in a post on X, formerly known as Twitter.
The newly created reserve will not involve the sale of any Bitcoin deposited within it; instead, Sacks emphasized that the cryptocurrency will be retained as a valuable asset. This marks a significant shift in Trump's stance, as just four years ago, he referred to Bitcoin as appearing "like a scam." Now, he aims to transform the United States into the Crypto Capital of the World.
Further details regarding the strategic reserve are anticipated as Trump prepares to host the inaugural crypto summit at the White House on Friday. However, there are concerns over potential legal challenges that the reserve may encounter, and whether it will necessitate an act of Congress to fully implement.
Sacks described the stockpile as a "digital Fort Knox" for Bitcoin, drawing parallels with the Kentucky military base that secures a substantial portion of the nation's gold assets. Trump's executive order also extends the concept of a digital assets stockpile to include other cryptocurrencies besides Bitcoin that have been forfeited. This initiative mandates a comprehensive accounting of the federal government's crypto reserves, which Sacks estimates to comprise around 200,000 Bitcoin, translating to an impressive $17.5 billion (£13.6 billion) at current market rates.
While the specific benefits of this new stockpile for the American public remain unclear, Sacks assured that it would not impose any financial burden on taxpayers. However, his statements regarding the government's decision not to purchase Bitcoin contributed to a decline in the price of this prominent cryptocurrency, which fell by over 5% shortly after the announcement.
Countries around the world often maintain strategic reserves of national assets to diversify government portfolios and mitigate financial risks. For instance, the United States possesses a petroleum reserve, while Canada even has a maple syrup reserve. Earlier this week, Trump also disclosed five cryptocurrencies he hopes to include in the strategic reserve, namely Bitcoin, Ethereum, XRP, Solana, and Cardano. Following this announcement, the market prices of these five digital currencies experienced a rapid increase.
Throughout his presidential campaign, Trump actively sought the support of the crypto community. In contrast, former President Joe Biden has led a more stringent approach towards cryptocurrencies, citing concerns related to fraud and market manipulation. This executive order marks a pivotal moment in the intersection of government policy and digital assets, showcasing a significant shift in the narrative surrounding cryptocurrency in the United States.
