On March 7, President Donald Trump officially announced that the United States would create a Strategic Bitcoin Reserve through an executive order entitled “Establishment of the strategic Bitcoin Reserve and the US digital asset stock.“
Unlike the previous announcement that described a Wider crypto reserveThis new executive order introduces the idea of a strategic reserve exclusively for BTC, which addresses a concern that many industry enthusiasts had when Trump first mentioned A cryptoic reserve on March 2. This executive order also introduces the concept of a “digital asset storage” that includes different crypto courses. This is how it works.
How Bitcoin Strategic Reserve works
While many people believed that Bitcoin Strategic Reserve would require the US government to buy BTC to fill the reserve, the actual method for building the reserve is completely different. The reserve will mainly be “utilized with all BTC held by the Department of the Treasury, which was finally forfeited as part of the procedure for criminal or civilian access or in satisfaction of any civilian money sanctioned by any executive department or agency.” In other words, the reserve will be created with BTC, which US authorities have taken hold of people arrested or received as payment for penalties.
In addition to this first method for getting BTC, the executive order requires the Secretary of Finance and the Commerce Secretary “to develop strategies to acquire additional government BTC”, provided that the strategies remain budget neutral and do not use taxpayers. This means that the government is actively investigating ways to Increase their BTC holdings Without using tax dollars.
Virtual Fort Knox: US strategic bitcoin reserve
The Bitcoin strategic reserve is treated as a traditional strategic reserve – a storage of an asset, usually a commodity, which the US government builds up and drops during times of disaster, financial anxiety or crisis. However, unlike other reserves, such as the strategic petroleum reserve, it is difficult to imagine a scenario where the government would have to use a BTC reserve. The executive order keeps the language around this vague and simply says that BTC’s strategic reserve will “be used to meet state goals in accordance with applicable law.”
For this reason, the BTC Strategic Reserve is compared with the US strategic gold reserve, which serves as a long -term asset held for strategic purposes rather than a resource to be traded or liquidated under normal circumstances. President Trump even referred to the reserve as US “Virtual Fort Knox” during the White House’s Crypto summit. This reinforces the idea that Bitcoin Strategic Reserve shares many similarities with one Gold reserve.
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Why even have a Bitcoin reserve?
Trump’s administration does not create only one Bitcoin reserve because it was one of their promotional promises; There are other, more significant incentives behind this trait. The administration wants the United States to lead in the Cryptocurrency industry.
“Last year I promised to make America the world’s BTC superpower and the planet’s crypto, and we are taking historical measures to deliver that promise,” Trump said at the last summit in the White House.
During the previous administration, especially during Gary Gensler’s term of office as Securities and Exchange Commission (SEK) Chairman, US Cryptocurrency industry met significant restrictions. In order to put this in perspective, the US financial sector represents about 30% of the global financial industry, but its Cryptocurrency industry represents only about 5% of the global crypto markets, which highlights the idea that there is a certain systematic difference that stops Cryptocurrency -innovations in America.
But with a new administration in place in the White House and Sec, the Cryptocurrency industry sees regulatory obstacles away or changed, Creating an environment where crypto companies can renew freely and even count on presidential support.
According to White House Crypto and Ai Czar David SacksThe US government has historically managed its BTC holdings. The abandoned“It is estimated that the US government owns about 200,000 bitcoin (…) premature sales of bitcoin has already cost us taxpayers over $ 17 billion in lost value. Now the federal government will have a strategy to maximize the value of its holdings. “
This means that the new executive order could change this alleged misconduct to a strategic advantage that sets the United States able to take advantage of its BTC holdings rather than losing due to premature sales and lack of the total strategy in addition to selling the coins in its possession on government auctions.
Worry from the crypto -community
Despite the government’s optimistic views, the executive order has not been universally welcomed. Many long -lasting crypto enthusiasts supported bitcoin because of its decentralization and independent from government control; With the US government now actively accumulates Bitcoin worries that it may have influence over the market, especially given its significant holdings.
A new era for crypto in the United States
The Cryptocurrency industry is now founded to thrive, with the government that creates a supportive environment and explores ways to maximize its digital assets. But this new strategic reserve can have a global domino effect; Now other governments may feel pressured to compete with the United States when it comes to crypto, especially those who have smaller amounts of BTC or no BTC at all. These countries would need to develop strategies for building or increasing their warehouses, which may mean market purchases that potentially increase prices.
Despite the White House Pro-Crypto attitude, the Cryptocurrency markets are still bleeding hundreds of millions of dollars a day as they continue to decrease in the midst of broader macroeconomic problems. The real effect of the strategic Bitcoin reserve remains to be seen. Nevertheless, it is probably a basic element of these early chapters in the Trump administration’s relationship and impact on the Cryptocurrency industry.
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