- President Donald Trump has signed an Executive Order to establish a U.S. Strategic Bitcoin Reserve, consolidating confiscated Bitcoin as a long-term store of value.
- To ensure transparency and prevent financial losses from seized Bitcoin sales, the initiative requires a comprehensive audit of all government digital asset holdings.
It has been days after U.S. President Donald Trump ordered the inclusion of several cryptocurrencies including Bitcoin, Ethereum, Solana, XRP, and Cardano. Now, Donald Trump has signed an Executive Order to create a U.S. Strategic Bitcoin Reserve.
Notably, this reserve will be utilizing Bitcoin obtained through criminal and civil asset forfeiture. Notably, this initiative aims to create a national reserve as a store of value. Additionally, this reserve will be built solely from these existing confiscated holdings by the federal government.
Through a detailed announcement via the x Platform, Crypto Czar outlined the key elements of the executive order.
As per Czar David, the government currently holds an estimated 200,000 Bitcoin, though a full audit has never been conducted to verify the exact figure. To remedy this, the Executive Order mandates an audit of all federal digital asset holdings, ensuring transparency in the government’s cryptocurrency assets.
With only a short period of time in office, Donald Trump’s move marks a significant shift in how the U.S. views the digital asset landscape. The establishment of the reserve impacts the perception on what cryptocurrencies are supposed to be viewed, (long-term) store of value.
Additionally, The government’s decision to keep the Bitcoin rather than liquidate it, as was done in the past, aligns with the idea of Bitcoin as a form of “digital gold.”
David Sacks emphasized;
The U.S. will not sell any Bitcoin deposited into the Reserve. It will be kept as a store of value. The Reserve is like a digital Fort Knox for cryptocurrency.
Despite the boldness of this move, it has encountered numerous challenges. Critics, including prominent Bitcoin skeptic Peter Schiff, have pointed out that the reserve will only include Bitcoin obtained through forfeiture proceedings and will not involve any additional government purchases.
Schiff noted;
While it’s up for debate whether the government can buy more Bitcoin for the strategic reserve, the one thing the executive order makes clear is that the crypto stockpile will consist only of seized tokens, so no ETH, XRP, ADA, or SOL will be bought. So at least there’s that!
Audit of Federal Digital Asset Holdings
Additionally, a legal barrier, highlighted in a recent report, prevents the U.S. government from using taxpayer money for a Strategic Bitcoin Reserve without congressional consent, a key aspect of the Executive Order’s financial accountability.
To circumvent this, the administration is considering alternative funding models, including the repurposing of seized Bitcoin and the establishment of a sovereign wealth fund.
Also, the Executive Order introduces a broader concept, the U.S. Digital Asset Stockpile, which will hold digital assets beyond Bitcoin that were obtained through legal forfeiture. However, no new acquisitions will be made outside of these forfeited assets.
The Secretaries of Treasury and Commerce are tasked with developing strategies to acquire more Bitcoin in a budget-neutral manner, ensuring that there is no additional cost to the taxpayer.
The Executive Order also addresses the need for a more robust strategy in handling confiscated digital assets. David Sacks criticized the previous administration, revealing that the U.S. had lost over $17 billion by selling seized Bitcoin rather than holding it.
He argued that a more thoughtful, long-term approach would have prevented such losses and better safeguarded taxpayer money.