Will the US buy bitcoins

Trump’s executive order on cryptocurrencies gained a few important points. First of all, government agencies were banned from issuing or promoting central bank digital currencies, also known as CBDCs. This was one of Trump’s campaign promises, which he has already implemented.

The document also suggests the formation of a working group on digital asset markets, which will consist of the US Treasury Secretary, Attorney General, SEC Chairman, CFTC Chairman and other top politicians. The latter are tasked with presenting norms for the regulation of digital assets within 180 days, as well as assessing the prospects for the formation of a national reserve of coins, which was also promised by Trump in the election campaign.

US President Donald Trump

However, the direct quote talks about assessing “the potential creation and maintenance of a national stockpile of digital assets,” not a reserve. And it also specifies there that the amount of coins can be formed “from cryptocurrencies that have been lawfully seized by the federal government in law enforcement actions.”

This phrase differs significantly from the “strategic Bitcoin reserve”, which they want to create in Oklahoma, Texas, Pennsylvania, Ohio and other US states. Representatives of the latter clearly declare the allocation of funds specifically for the purchase of digital assets with money from the respective funds.

And although during the last months the words “reserve” and “reserve” have often replaced each other, there are still important differences between them, which can affect the final result. Rebecca Rettig, head of legal at Jito Labs, commented on the moment, a line from which The Block quotes.

As far as I understand, “reserves” refers to the storage by the government of cryptocurrency accumulated as a result of various transactions, while “reserve” implies the direct purchase and storage of coins by the Ministry of Finance.

As a reminder, US authorities have seized huge amounts of cryptocurrencies in various enforcement actions. Examples of such include the seizure of bitcoins stolen from the Bitfinex exchange in 2016, as well as the seizure of coins following the liquidation of the darknet platform Silk Road, whose creator Ross Ulbricht was released from prison this week.

Rettig continues.

From a legal standpoint, it’s unclear whether they can use the confiscated assets as part of the reserve. So I wonder if the wording was chosen in an attempt to get around that point and determine how they intend to accumulate cryptocurrency. Or are they planning to simply use digital assets that have already been confiscated.

As of today, the U.S. government holds $21.13 billion worth of coins, as confirmed by the Arkham platform. 20.66 billion of that amount is in bitcoins, which is equivalent to 198,109 coins.

The volume of cryptocurrencies at the disposal of the US government

In second and third place sit ether and the USDT stablecoin at $180.18 million and $122.13 million respectively.

They already have a number of assets at their disposal, but it is unclear what exactly they will buy. Generally, there are many rumours about whether XRP, SOL or something similar will be included, but there is no clarity on this yet.

Earlier sources reported that the reserve of digital assets can be formed from coins whose developers are located in the United States. The largest of them are XRP and SOL.

For what criticised the national crypto reserve of the United States

The representative of the Blockchain Association Ron Hammond believes that such wording was used on purpose. Still, it will create space for decision-making and possible changes in the future. Here’s an expert’s comment.

It is unclear whether Trump chose a specific token or whether he has other coins in mind. In my opinion, this point was made vague on purpose, which is generally relevant for an entire executive order.

US President Donald Trump buys burgers with bitcoins

TD Cowen representatives, led by Jarett Seiberg, are still unsure about the prospects of the US government buying bitcoins. Still, it would pose risks to the dollar’s role around the world.

We doubt it, because Trump’s priority is the U.S. dollar. And it as a reserve currency could be jeopardised if countries start switching to Bitcoin.

And here’s a rejoinder from dYdX Trading general counsel Jake Verrett. He suggests that creating a Bitcoin reserve will lead to serious buying pressure. The U.S. could end up buying the coins at a higher rate – here’s the analyst’s rejoinder.

The obvious problem with creating a strategic reserve of significant size is that any aggressive buying strategy will cause price pressure, and the US will trigger its own overpayment. The thoughtful realisation of such a reserve would take many months – or even years, using confiscated assets or settlement coins.

Cryptocurrency purchases by investors

Trump’s executive order was earlier criticised by Bitcoin fans who see no point in the existence of other coins. They were concerned that the decree contained a mention of digital assets but not BTC itself.


Whether the US government will buy the cryptocurrency or simply use the previously confiscated coins is still unknown. Apparently, the wording about "stockpiles" of crypto was used just to address this issue later. Still, the country needs a framework for regulating digital assets first.


Look for more interesting stuff in our crypto chat. We look forward to hearing from you.

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