President Donald Trump’s decision to establish official government cryptocurrency reserves in the US has drawn criticism from industry watchers.
He has issued an executive order establishing a digital asset stockpile, which will include various digital currencies, and what he refers to as a strategic bitcoin reserve.
Coins forfeited to the federal government as a result of criminal or civil proceedings will be used to stock the funds.
White House AI and crypto tsar David Sacks compared them to a “digital Fort Knox for the cryptocurrency,” referring to the Kentucky military base that houses a significant portion of the United States’ gold assets.
However, some cryptocurrency enthusiasts have criticized the government for not being more daring, while others have expressed concerns about the lack of transparency in the process.
Sacks has ordered a full accounting of the federal government’s existing cryptocurrency reserves, which he estimates to be worth 200,000 Bitcoin alone. At current prices, that is worth $17.5 billion (£13.6 billion).
Speaking to reporters at the White House ahead of a special crypto summit on Friday, Sacks stated that it was a “real shame that we did not maximize value for the American taxpayer.”
“What we want to do is ensure that with the remaining Bitcoin,” he stated.
Nonetheless, Charles Edwards of the Capriole Fund, a Bitcoin and digital asset hedge fund, called Thursday’s announcement “a pig in lipstick” in response to Sacks’ X post.
“No active buying means this is just a fancy title for Bitcoin holdings that already existed with the government,” he said.
Trump’s executive order says that the Treasury and Commerce secretary will come up with strategies for acquiring more government Bitcoin, provided these are “budget neutral and do not impose incremental costs on United States taxpayers.”
That means, Sacks told reporters, they are only “allowed to buy more if it does not add to the deficit or debt.”
Jason Yanowitz, co-founder of cryptocurrency firm Blockworks, supports the concept of a Bitcoin reserve, but believes that including other coins sets a “horrible precedent” and “makes no sense.”
“Without a clear framework, we risk arbitrary asset selections, distorting markets and causing a loss of public trust,” he said.
Other analysts have been more optimistic.
“This approach makes far more sense than purchasing the assets,” said Russ Mould, investment director at AJ Bell.
“It would be bizarre for the US to sell dollars to buy cryptocurrency, given that the dollar is the world’s reserve currency and thus a source of enormous influence.”
‘Will not cost a dime.’
More information is expected when the president speaks at the first cryptocurrency summit at the White House.
Although the exact benefits of a cryptocurrency reserve for Americans are unknown, Sacks told reporters that it “will not cost taxpayers a dime.”
It is also unclear if the planned reserve might need a congressional act or run into legal issues.
According to Sacks, the US will retain Bitcoin as an asset and will not sell any that have been placed in the reserve. Bitcoin will be the only cryptocurrency in the reserve; all other cryptocurrencies will be placed in a different stockpile.
His suggestion that the US government would not purchase Bitcoin caused the price of the biggest cryptocurrency in the world to drop by over 5%.
To diversify their government holdings and protect themselves from financial risk, some nations keep strategic reserves of their own assets.
The U.S. also has a petroleum reserve. Canada has a maple syrup reserve.
By :- Next Tech Plus
