March 11, 2025 10:58 IST
First published: March 10, 2025 07:41 IST
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In 2019, Donald Trump wrote on his social media platform that “not a fan of Bitcoin or other cryptocurrencies, not money, but its value is based on a very unstable and thin air.” But then Trump overturned his position. In 2024, he appointed a crypto-friendly regulator and committed to making the United States “crypto-capital of the globe.” A few days before the inauguration, he launched a memo coin called $Trump. Last week he went a step further. The president has signed an executive order to establish strategic Bitcoin reserves and US digital asset stockpile. And on Friday, the White House held a crypto summit.
According to the executive order, the preparation will be capitalized in Bitcoin, owned by the Treasury Department, as “confiscated as part of a criminal or civil assets forfeiture procedure.” Other government agencies will also “assess legal authority” to shift Bitcoin to strategic preparation. However, there was no complete audit of US government Bitcoin holdings across various institutions. Like David Sachs, the White House AI and the Cryptocratic Emperor, the US government owns around 2,00,000 bitcoins. The executive order raises several questions. It says that deposited Bitcoin will not be sold. So, what purpose does it serve? Strategic preparations are created by the country. For example, there are oil reserves in the US, and Canada has ones for maple syrup. The executive order also states that the government will not acquire additional assets for stockpiling, and further additions to the reserves will be budget-neutral. This means that there are no new, large buyers in the market for now. But if that changes, the US government could become a major player with the ability to influence prices. But if not, will future additions be limited to forfeitured bitcoin? And what about the other four coins Trump mentioned?
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However, US strategic reserves have shown a major change in how Washington sees cryptocurrency. And given the boundless nature of such assets, it is difficult to have an outlier regulatory stance, as more and more countries are guiding regulatory frameworks. Therefore, a more carefully considered approach is required. In this regard, recent reports that the Indian government is reconsidering its discussion paper on cryptocurrency are welcome. Navigating this increasingly complex and rapidly growing area requires clarity and consistency of regulations, as well as institutional mechanisms that protect investors’ interests and ensure market integrity.
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