As the 47th President of the United States, Donald Trump has kickstarted his second non-consecutive term by signing an executive order that will make America a global cryptocurrency hub.
The order titled “Strengthening American Leadership in Digital Financial Technology” includes several key directives that will help establish the U.S.’s dominance in digital assets. One of these is creating a crypto working group.
The group will draft a new policy framework to regulate the rapidly evolving technology, covering stablecoin and digital assets. It will also assess the establishment of a “national digital asset stockpile.”
The group has until July to submit a comprehensive report that will address the stockpile criteria and shape future regulatory proposals.
With this big move, Trump has begun to deliver on the promises that he made to the crypto industry last year on his campaign trail. However, the formation of a “digital asset stockpile” has become a cause of concern among the crypto market participants.
The concern has been due to the order veering off from a Strategic Bitcoin Reserve (SBR) and covering crypto in general. Some crypto enthusiasts were also left disappointed when Trump didn’t order the immediate buying of BTC for the reserve.
The bigger concern, however, is that Trump has yet to clarify whether the stockpile would include buying more Bitcoin in the open market or derived from the government’s stockpile of 200,000 BTC seized through law enforcement efforts.
Commenting on the concerns the order has sparked among Strategic Bitcoin Reserve advocates, crypto project SBR — which spreads awareness about the movement, said Trump’s order “marks a pivotal and bullish shift.”
The foundational policy framework, it noted, demonstrates that Bitcoin remains “strategically significant in discussions of the U.S. financial future.”
Also, the appointment of Senator Cynthia Lummis, who’s the strongest advocate of SBR, as the chair of the Senate Subcommittee on Digital Assets is a “clear indication” that Bitcoin’s importance in national strategy is not just theoretical, SBR added, “but being actively discussed and developed by key decision-makers.”
Senator Lummis is also behind the “Bitcoin Act of 2024,” which proposes acquiring 200,000 BTC annually for five years. These purchases would be funded by the Treasury’s gold holdings. This BTC stockpile, Lummis believes, can protect the US against inflation and at the same time, defend the US dollar on the world stage.
Betting Big on Bitcoin’s Future
A Strategic Bitcoin Reserve (SBR) is currently the most bullish development for the trillion-dollar asset and, by extension, the broad crypto sector. A strategic reserve is simply a stockpile of essential resources held by governments to mitigate unexpected events like geopolitical instability, economic crises, and natural disasters.
As we have seen, it is gaining a lot of traction in the US at the national level, but that’s not all. Even US states are keen on leveraging BTC’s potential to power their economic growth and financial resilience.
At least 15 states, including Wyoming, Oklahoma, Texas, Florida, Alabama, New Hampshire, Pennsylvania, Arizona, Utah, Ohio, and Pennsylvania, are actively advancing legislation for the Strategic Bitcoin Reserve.
While many seem perturbed by the idea of Bitcoin reserve, it won’t be the first time a nation has created a strategic reserve of a critical resource. For instance, back in 1975, the US created a Strategic Petroleum Reserve. This supply of emergency crude oil has been tapped into during times of war to calm markets. Other countries also have unique stockpiles, such as Canada’s strategic reserve of maple syrup and China’s strategic reserves of pork products.
When it comes to Bitcoin, it can work much like gold, which is held by central banks to store wealth, hedge against inflation, diversify assets to mitigate risks, and support the value of a country’s national currency.
Bitcoin, with its limited 21 million supply, actually offers a far more valuable wealth protection tool that is resistant to inflationary pressures. An SBR can offer countries a strong alternative to gold and fiat currencies that operate without borders and potentially appreciate in value.
Coinbase CEO Brian Armstrong is also urging governments to buy Bitcoin using a portion of their gold reserves. BTC, he argues, is a “better form of money” than precious metal and a much stronger store of value. “If the US leads here with a Strategic Bitcoin Reserve, I think many of the G20 will follow,” said Armstrong.
Others are of the same view, with Nigel Green, CEO of deVere Group, saying that a US Strategic Bitcoin Reserve is simply an inevitability, which could trigger a “crypto arms race,” leading countries to start acquiring BTC in anticipation of its role in a new global financial order.
The Executive Order from Trump overall marks a critical turning point for the entire industry, which is putting a stop to government-sponsored digital currencies (CBDC), ensuring people’s right to self-custody, promoting open-source technology, and protecting blockchain networks from censorship.
With a focus on “protecting and promoting” the use and development of digital assets, the order, as crypto project SBR stated, takes a “deliberate approach” to integrate crypto into U.S. policy and validates “Bitcoin’s role in the future of finance.”
By placing Bitcoin at the heart of the American digital economy, we are seeing the beginning of a new era of crypto innovation and growth.
