The US Government’s Role in Creating The National Crypto Reserve

The Trump regime is keen to establish a strategic Bitcoin reserve. The US government has taken many proactive measures to integrate and promote digital assets to enhance national and economic security. Therefore, these measures are already creating a ripple effect on the financial sector and will shortly lead to many transformations that will benefit the world. On 6th March, Donald Trump signed an executive order to establish a strategic bitcoin reserve. The details of the crypto asset, government practices, custody, and administration plans offer a glimpse into how the reserve will operate in the future. 

Role of Bitcoin in National Crypto Reserve

The role of Bitcoin in the national crypto reserve is the most crucial one. The US government is going to leverage the existing crypto holdings and will exceed 200,000 BTC including the seizures. These assets will provide a proper base for the reserve and are already under the control of the US federal government. 

The Department of Justice (DOJ) oversees the management of US government crypto assets under the Digital Asset Forfeiture Program. Hence, the federal government has taken many proactive steps such as the following to ensure better integration of digital assets. 

• Wallet management
• Liquidation services for seized crypto assets
• Established links with institutional crypto custodians
• Offers cryptos for sale

Shortcomings in the US Government’s Policies

The US Government acknowledges that the integration of digital assets is not feasible without addressing the present shortcomings. The shortcomings they have identified are as follows.

• Assets are scattered across multiple Federal agencies
• The approach is too diverse and non-cohesive
• Options of secure crypto holdings are yet to be explored
• The maximization of values is yet to be explored
• Multi-signature wallet storage needs to be standardized
• Segregated storage
• Strategic portfolio management
• Specialized regulatory oversight is needed.

Therefore, the US government prefers segregated storage and opposes pooling crypto assets in one omnibus wallet. 

Major Steps in Creating A National Crypto Reserve

The major steps in creating a national crypto reserve are as follows. President Trump signed an executive order to establish a strategic Bitcoin reserve. The move will have an impact on several cryptocurrency exchanges and will fundamentally transform the way we perceive the financial world. Hence, the steps are indeed defining the future of finance as we know.

• The Strategic Bitcoin Reserve can capitalize on Bitcoin as a major reserve. The Department of Treasury will include forfeited Bitcoins as a part of civil or criminal asset forfeiture proceedings. 
• The United States will not sell Bitcoin into the reserve and will maintain it as a store of reserve assets.
• There will be budget-neutral strategies to acquire additional Bitcoin. Therefore, Bitcoin may play a key role in budget allocation as well. 
• The Treasury and Commerce secretaries will allocate budgets to acquire extra Bitcoins such that it does not cost the American taxpayers at all. 
• The government will not acquire extra assets for the US Digital Asset Stockpile beyond the forfeiture proceedings. 
• Agencies can offer a full accounting of digital assets to the President’s Working Group on Digital Asset Markets.

America Will Become The World’s Crypto Capital

The US government led by Donald Trump is taking several measures not only to create a national Bitcoin reserve but also to turn the country into the world’s crypto capital.  Henceforth, these are the firm decisions that the government wants to take.

• Donald Trump promised to make the United States the world’s crypto capital. He has publicly emphasized the need to embrace digital currency to boost economic growth and technological leadership. Thus, there is little doubt regarding his commitment towards decentralized finance. 
• Trump also signed an  Executive Order to promote US leadership in digital assets such as cryptocurrency. Hence, the intentions are clear, although actions and consequences matter more in this regard. 
• He also appointed a crypto czar to oversee the entire crypto industry. He hosted the first-ever crypto summit at the White House. The hosting demonstrated that his regime is firmly committed to digital assets. Hence, these measures signal the change in the attitude of the government. 

Advantages of A National Crypto Reserve

The advantages of a national crypto reserve are manifold. These are some of the advantages that the reserve can provide not just for the US but also for the world. Therefore, in the near future it is reasonable to assume that these advantages will outweigh the disadvantages. 

Portfolio Diversification and Wealth Preservation

The traditional reserves of governments have foreign currencies, real estate, gold, and silver. These are all susceptible to geopolitical risks and are not immune from market forces. Bitcoin improves diversification and it represents both decentralized and resilient reserve options. Therefore, diversification can enhance investor confidence and in some situations improve profitability. 

Decentralization of Financial Resources

The creation of the reserve will invariably pave the way for further financial sovereignty and decentralization. Public entities and private companies will retain financial stability better by storing Bitcoin as an alternative.  Thus, decentralization is the real forte of this reserve. 

Global Acceptance and Liquidity

Bitcoin offers 24/7 market liquidity. This is a trait absent in gold and real estate. Swift transactions and economic costs make it the most flexible reserve asset for the economy. Hence, global acceptance can change the fortunes of Bitcoin forever. 

More Growth Potential

Bitcoin and the other top cryptocurrencies have surged substantially since its inception and are outperforming traditional assets. The volatility factor does not seem to be a spoiler in this regard. The long-term store of value for corporations and governments holds the key to expansion.  Hence, the future may well belong to cryptocurrencies. 

Final Thoughts

The US government is playing a key role in creating the Crypto National Reserve. The policies that the government is taking will and are already having an impact on the decentralized finance sector. Therefore, the future of cryptocurrencies at the moment seems to be bright since they indeed have the answers to resolve most of the financial problems. Hence, the formation of a crypto reserve may improve institutional engagement and enable the growth of the financial industry. However, cryptocurrency regulations and how they will be implemented will also determine the degree of success of the reserve. There is also another view that says that people will gain financial freedom once the reserve becomes a reality because banks will not play a role in it.