The President of the United States, Donald Trump, has decided to create an official government cryptocurrency reserve. However, this decision has sparked criticism from many experts in the industry. Some have strongly opposed the idea, calling the move “a pig in lipstick,” fearing it could set a bad example for the future.
On Thursday, Trump signed an executive order to establish what he called a Strategic Bitcoin Reserve along with a Digital Asset Stockpile, which will include various digital currencies.
Reports suggest that the funds in these reserves will come from cryptocurrencies that were confiscated by the government due to criminal or civil cases. The White House’s AI and Crypto Policy Advisor, David Sacks, referred to the new reserve as a “digital Fort Knox for cryptocurrency”, comparing it to the highly secure gold storage facility at Fort Knox, Kentucky, where much of the U.S. gold reserves are kept.
While some crypto supporters welcomed the idea, others criticized the government for not being more ambitious. Many also raised concerns about the lack of transparency in how this initiative will work.
Speaking ahead of the White House Crypto Summit, Sacks told reporters on Friday that it was a “real shame” that the previous administration, under Joe Biden, did not take advantage of cryptocurrency opportunities. He suggested that Biden’s restrictions on digital currencies had prevented the U.S. from benefiting financially, while Trump’s policy would reverse those limitations.
Charles Edwards, a manager at Capriole, a hedge fund specializing in Bitcoin and digital assets, responded critically to the announcement. He argued that without the government actively buying Bitcoin, this reserve is “just a fancy title” for holdings the U.S. government already possesses.
Jason Yanowitz, co-founder of the crypto firm Blockworks, supported the idea of a Bitcoin reserve but was concerned about the inclusion of other cryptocurrencies. He warned that without a clear set of rules, the government could arbitrarily choose which digital assets to include, potentially harming the market and public trust.
Meanwhile, Russ Mould, an investment director at Aj Bell, pointed out that holding Bitcoin is a more logical approach than buying it. He argued that it wouldn’t make sense for the U.S. to sell dollars to buy cryptocurrency, given that the dollar is the world’s dominant currency and a key source of U.S. financial power.
Despite the ongoing discussions, it remains unclear how this new cryptocurrency reserve will benefit American citizens. However, Sacks assured reporters that it “won’t cost taxpayers anything.” He explained that the government will not sell any Bitcoin held in the reserve but will keep it as a long-term asset. Other cryptocurrencies will be stored in a separate stockpile.
Government-controlled Bitcoin reserves are uncommon globally. The U.S. already maintains gold and petroleum reserves, while countries like Canada hold maple syrup reserves to safeguard key national assets and diversify their financial resources.
