President Trump on Thursday signed an executive order to establish a “Strategic Bitcoin Reserve” and a stockpile of U.S. digital assets.
The move came after Trump’s proposal for a crypto reserve sparked unexpected blowback from tech leaders because he initially said over the weekend that digital assets other than bitcoin would also be part of the reserve. Trump’s administration then made a distinction between the reserve and a separate stockpile.
Trump, who vowed to be America’s “first crypto president,” has struck a friendly tone toward an industry that backed him during his presidential campaign.
In January, he signed an executive order to support digital financial technology. And the U.S. Securities and Exchange Commission has dropped lawsuits against cryptocurrency exchanges Coinbase and Kraken and paused a civil fraud case against crypto entrepreneur Justin Sun, who praised Trump and invested in his crypto ventures.
The White House’s first-ever crypto summit is scheduled for Friday.
Here’s what to know:
What is a crypto reserve?
The Trump administration describes the creation of a national stockpile of digital assets, potentially including cryptocurrencies the federal government lawfully seized from criminals, in a January executive order. Trump also touted the idea of a bitcoin reserve during his presidential campaign.
On March 2, Trump said in a Truth Social post that the reserve would include cryptocurrencies XRP, solana, cardano and ether as well as bitcoin. The U.S. government holds an estimated $17 billion worth of bitcoin but has also seized other cryptocurrencies, data from Arkham Intelligence shows.
The Trump administration then said Thursday that the president is establishing a strategic bitcoin reserve and a stockpile of U.S. digital assets.
In the past, the U.S. has created reserves for valuable resources such as petroleum, helium and medical supplies, allowing the government to tap into these emergency supplies during times of crisis such as a national disaster or a war. The U.S. Treasury also stashes away gold, an asset considered a hedge against inflation because its value has historically increased.
“This is an odd thing for Republicans to be proposing, because it’s got the government intervening in the economy to provide [a] service to the public that the public can provide for themselves,” said Larry Harris, a professor of finance and business economics at the USC Marshall School of Business.
Why does Trump want a crypto reserve?
Trump said in his Truth Social post the reserve would “elevate” the cryptocurrency industry “after years of corrupt attacks by the Biden Administration” and is part of efforts to make the U.S. the “crypto capital of the world.”
Because the cryptocurrency industry poured hundreds of millions of dollars into backing Trump and other congressional candidates, some critics question whether Trump is just trying to reward his campaign supporters or himself. Trump and his wife, Melania, launched separate meme coins and his family has ties to a crypto venture called World Liberty Financial, sparking concerns about potential conflicts of interest.
White House AI and crypto czar David Sacks, who co-founded venture capital firm Craft Ventures and worked at companies such as PayPal, also faced allegations of conflicts of interest. He pushed back against the claims on X, stating that he sold all his cryptocurrency, including bitcoin, ether and solana, before he joined Trump’s administration.
Wyoming Republican Sen. Cynthia Lummis introduced a federal bill to create a bitcoin reserve, noting that holding the digital asset could provide a “hedge against economic uncertainty and monetary instability.”
Such a reserve would require congressional support. But financial experts say a crypto reserve is risky because digital assets such as bitcoin are notoriously volatile, swinging in value.
“There’s no question that there will be crashes. So how can it possibly make any sense for the government to associate itself with something that’s going to die, that’s going to crash, even if it comes back again afterwards?” Harris said.
How did tech leaders and crypto enthusiasts initially react to the idea?
Earlier this week, tech leaders and even cryptocurrency executives who backed Trump expressed skepticism about the creation of a reserve that includes tokens other than bitcoin. After Trump mentioned specific tokens in his reserve announcement, the prices for bitcoin, XRP, solana and other cryptocurrencies spiked, only to fall back down.
“It is picking a winner technology-wise. And the problem is we’re not really even in the first inning of that battle,” said Gene Hoffman, chief executive of Chia Network, a blockchain technology company based in South San Francisco.
Some bitcoin supporters want to see the federal government treat the cryptocurrency like gold, but there’s another group of people who “frankly bought access to the White House,” Hoffman said.
Ripple, which has ties to XRP and holds the digital asset, pointed to remarks from its chief executive, Brad Garlinghouse, who said he was “Glad to see POTUS recognizing we live in a multichain world.”
Redwan Meslem, executive director of the Enterprise Ethereum Alliance, said in a statement that the “crypto industry naturally fosters debate about different technological visions” and the group embraces this “diversity of thought.” He said that the group was pleased Trump included ether in his announcement and that the “market has already recognized Ethereum’s maturity.”
Tyler Winklevoss, who co-founded cryptocurrency exchange Gemini, said on X he thinks only bitcoin is suitable for the reserve.
Brian Armstrong, CEO of the cryptocurrency platform Coinbase, said on X that a bitcoin reserve is the “best option” but also suggested “a market cap weighted index of crypto assets” for people who wanted more variety in the reserve.
Some tech leaders initially opposed the idea for different reasons.
Venture capitalist Joe Lonsdale, who co-founded Palantir Technologies and is a Trump supporter, said on X: “It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes.”
The Trump administration addressed some of the concerns in its executive order.
Will taxpayer dollars fund the reserve and the digital asset stockpile?
Sacks said in a Thursday post on X that the reserve “will not cost taxpayers a dime” because it includes bitcoin that the federal government already owns. The cryptocurrency was forfeited as part of criminal or civil asset proceedings.
“The U.S. will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value,” he said in the post.
The separate U.S. digital asset stockpile will include cryptocurrencies other than bitcoin that have also been forfeited in criminal or civil proceedings.
“The government will not acquire additional assets for the Stockpile beyond those obtained through forfeiture proceedings. The purpose of the Stockpile is responsible stewardship of the government’s digital assets under the Treasury Department,” he said in the post.
The White House didn’t immediately respond to a request for comment.
What happens next?
The White House is hosting its crypto summit on Friday, and executives from Ripple, Gemini, Robinhood, Kraken, Coinbase, World Liberty Financial and other companies are expected to attend. More information about the reserve idea is expected to be revealed then.
