US President Donald Trump on Thursday signed an executive order to create a ‘Strategic Bitcoin Reserve,’ endorsing cryptocurrency.
The government stockpile, which can be likened to a “digital Fort Knox,” will be composed of digital currency seized in US criminal proceedings, said David Sacks, the White House’s crypto czar, emphasising in a social media post that Thursday’s move was Trump’s election campaign promise.
The move comes a day before meeting with executives from the cryptocurrency industry at the White House. The event is expected to serve as a stage for Trump to formally announce his plans to build a strategic reserve containing bitcoin and four other cryptocurrencies.
Here is everything you need to know about Donald Trump’s strategic bitcoin reserve:
What is a bitcoin strategic reserve?
A bitcoin strategic reserve is like any other stockpile that governments or other authorities keep. A strategic reserve is a stock of a particularly important asset, which can be released to manage serious disruptions in supply.
Why has the bitcoin strategic reserve been created?
Trump had in January signed an executive order for the creation of a digital asset working group to explore the possibility of a strategic bitcoin reserve.
According to White House Crypto Czar David Sacks, it is estimated that the U.S. government owns about 200,000 bitcoins. However, since there has never been an audit on finding out the exact number, the executive order on Thursday includes a directive to do so.
“The U.S. will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value,” he said in a post on X.
Which cryptocurrencies have been added?
Earlier this week, Trump announced the names of five digital assets he expects to include in this reserve, spiking the market value of each. These are bitcoin, ether, XRP, solana and cardano, the president said.
“IN ADDITION, the Executive Order establishes a U.S. Digital Asset Stockpile, consisting of digital assets other than bitcoin forfeited in criminal or civil proceedings,” Sacks confirmed on Thursday.
Trump’s move aims to support the crypto industry, which has backed him during his presidential election campaign, but this has drawn concern from some conservatives and crypto backers over giveaways to an already wealthy community and delegitimizing the digital currency industry, per the Reuters report.
Proponents of the Bitcoin Reserve say it would help taxpayers benefit from crypto’s price growth, though it is not clear how such a reserve would work or how it would benefit taxpayers.
