The incumbent U.S. President Donald Trump has signed an Executive Order to establish a strategic Bitcoin reserve. The reserve will be capitalized with Bitcoin owned by the federal government and seized through criminal or civil forfeiture proceedings.
During his campaign, Trump had already promised the creation of a strategic Bitcoin reserve. Specifically, the proposal pertains to the conversion of confiscated Bitcoin in the possession of the U.S. Department of Justice. Over the past decade, authorities have accumulated approximately $18 billion in Bitcoin through various seizures. Until now, the Justice Department had been selling these assets in smaller tranches. The Executive Order now prohibits the sale of these Bitcoin and other digital assets, as stated on the White House website.
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National Bitcoin Reserve
In the Executive Order, the Trump administration outlines why a national Bitcoin reserve is of significance. Bitcoin was the first cryptocurrency with a fixed supply of 21 million. Due to its scarcity and security, the asset is considered "digital gold." Having never been hacked, Bitcoin provides a strategic advantage for countries building reserves. The U.S. already holds significant Bitcoin holdings but has failed to fully leverage Bitcoin’s potential as a unique store of value in the global financial system, according to the Executive Order. Like other resources, the management of digital assets should also be conducted prudently and with a future-oriented approach to ensure national prosperity.
It is now U.S. policy to establish a strategic Bitcoin reserve. Furthermore, the global superpower will create a stockpile of digital assets that will serve as a secure account for the orderly and strategic management of the United States’ other digital asset holdings. Treasury Secretary Scott Bessent will establish an office within the next 30 days to manage and control custodial accounts under the designation “Strategic Bitcoin Reserve,” which will be capitalized with all Bitcoin held by the Treasury Department.
Other cryptocurrencies and stockpile expansion
Trump’s Executive Order on a strategic reserve, however, does not mention only Bitcoin, as he pointed out over the past weekend. Additionally, the Treasury Secretary is to establish another series of custodial accounts, known as the "United States Digital Asset Stockpile." These accounts will be funded by all other digital assets held by the Treasury Department, primarily Ethereum (ETH), Tether (USDT), and BNB.
Finally, the Treasury Secretary and the Commerce Secretary will develop strategies for acquiring additional government-owned Bitcoin, provided these strategies are budget-neutral and do not incur additional costs for taxpayers. A logical approach would be to focus on mining new Bitcoin. Other cryptocurrencies will not be increased at this time unless new Executive Orders or legislation are enacted.
