While Trump's announcement stoked excitement in the industry, questions remains over what the reserve could look like and how it might impact the digital currency space
Here are some of the key questions about Trump's plan:
🔷 What could a crypto strategic reserve look like?
Trump's comments confirmed his support for a cryptocurrency reserve and hinted at which digital assets could be included, but he offered few details on exactly how the stockpile could work.
"A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL [Solana], and ADA [Cardano]," Trump posted Sunday morning on Truth Social.
"And, obviously, BTC [Bitcoin] and ETH [Ethereum], as other valuable Cryptocurrencies, will be at the heart of the Reserve," he said in a follow-up post. "I also love Bitcoin and Ethereum!"
His comments built upon his executive order, signed in January, which established a working group on digital assets to be led by the White House's artificial intelligence (AI) and crypto czar, David Sacks.
The order tasked the group with evaluating the creation and maintenance of a "national digital asset stockpile." The group was expected to draft a criteria for the stockpile, which could be derived from the cryptocurrencies seized by law enforcement, the order stated.
The U.S. government is the largest holder of Bitcoin, with an estimated total of about $14.8 billion in its possession, according to research by CoinGecko.
The use of seized cryptocurrencies, however, could run into roadblocks as these assets often go back to the victims of financial crimes, observers told The Hill.
Another possible pathway could involve the U.S. going into the market and directly purchasing more assets, like Bitcoin or the others Trump highlighted.
🔷 What's the purpose of a crypto reserve?
The purpose of a crypto reserve, like other national stockpiles, has been framed to preserve the wealth of countries and to serve as a hedge against economic uncertainty, explained JP Richardson, the CEO of Bitcoin and crypto wallet Exodus.
Proponents of a reserve believe it will reinforce the growing value of digital currencies as the industry seeks to solidify crypto as long-term assets. In doing so, supporters believe it could eventually reduce the national debt.
By assuming crypto assets will continue growing in value and eventually help pay down national debt, supporters of the reserve argue taxpayers could benefit from the creation as well.
The Hill breaks down these questions and more in a full report tomorrow morning.
No comments:
Post a Comment