An executive order was recently signed to initiate the establishment of a Bitcoin Strategic Reserve, which will function as a repository for assets recovered by the US government from criminal activities. This initiative will also include the creation of a Digital Asset Stockpile to accommodate various cryptocurrencies.
The initial assets to be housed under this new reserve will consist of cryptocurrencies previously seized by the government during various legal actions. According to a government representative, the Bitcoin reserve is envisioned as “a digital Fort Knox for cryptocurrencies,” indicating a long-term commitment to holding these assets without selling them.
The announcement comes after a period of public speculation, stemming from prior discussions about a potential crypto reserve. Initially, various cryptocurrencies, including XRP, Solana, and Cardano, were mentioned as candidates for inclusion. However, emphasis shifted to Bitcoin and Ethereum, now deemed vital components of the reserve.
Currently, it is noted that the US government possesses approximately $18.28 billion in cryptocurrencies, primarily comprised of around 198,109 Bitcoin, estimated to be valued at $17.87 billion. Additional holdings include assets like Ether and Tether, with several other tokens also present in smaller amounts. Notably, the current inventory does not encompass various cryptocurrencies that gained initial attention.
In terms of management, the reserve will be funded predominantly by Bitcoin acquired through federal forfeiture proceedings, as per the executive order. This order explicitly calls for a detailed assessment of the federal government’s cryptocurrency holdings, something that has not been comprehensively executed in the past. The Treasury Department’s existing Bitcoin holdings are set to facilitate the reserve, while it is anticipated that other federal bodies will explore their legal options for transferring crypto assets into the new stockpile.
The executive order also tasks the Treasury and Commerce secretaries with formulating strategies to acquire further Bitcoin for the reserve, ensuring that these efforts will not place additional financial burdens on taxpayers.
Despite the significance of the executive order, the announcement did not yield anticipated improvements in the cryptocurrency market. Within a 24-hour timeframe, Bitcoin experienced a decline of about 5%, indicative of market sentiments regardless of the strategic measures being implemented.