The US Government's New Stance on the Cryptocurrency Sector

Since the victory of pro-crypto candidate Donald Trump in the US presidential election, the US government's attitude towards the cryptocurrency sector has changed.

Since the victory of pro-crypto candidate Donald Trump in the US presidential election, the US government’s attitude towards the cryptocurrency sector has changed. Since the induction of Trump, he has introduced several pro-crypto policies. The most prominent of those policies is the establishment of a US Crypto Strategic Reserve. How will it work, and what are the risks? Let’s break it down.

What is the US Crypto Strategic Reserve?

A US Crypto Strategic Reserve is a government-managed fund holding Bitcoin and other crypto assets, such as Etheruem, XRP, Solana and ADA.

It is expected to help the country to overcome threats like inflation and economic instability.

The reserve plan is also part of the US’ larger goal to become a global leader in the cryptocurrency industry.

The BITCOIN Act, a proposed bill, suggests purchasing at least 1 million BTC over five years. Importantly, funding would come from Federal Reserve reallocations, not taxpayers’ money.

Notably, certain states have announced plans to establish their own state cryptocurrency reserves.

How Will the US Crypto Reserve Be Managed?

The Trump administration has already introduced several policies to eliminate major crypto management challenges.

The US president recently established a special crypto task force under the US Securities and Exchange Commission to create a clear crypto regulation framework.

When Will the US Crypto Reserve Be Established?

The president recently signed an executive order related to the establishment of the reserve. Once the order receives approval from Congress, it will become a reality.

Why Are People Concerned about the US Crypto Reserve?

In an independent survey conducted in December 2024, only one out of the 40 top economists supported the argument that the US Crypto Reserve would benefit the economy.

Renowned economic analyst Steven Rattner, who is the CEO of Willett Advisors, stated: “A crypto reserve is an outright waste of taxpayer dollars aimed at enriching the crypto industry.”

Many industry leaders have expressed strong disagreement with Trump’s decision to expand the scope of the reserve beyond Bitcoin.

Coinbase CEO Brian Armstrong noted: “the crypto reserve fund would be better off sticking to bitcoin, as it is the simplest and offers the clearest similarities to gold.”

The Digital Chamber CEO Perianne Boring noted: “Bitcoin’s unique characteristics make it a stronger candidate for a national reserve asset compared to other cryptos.”

Notably, some have denounced Trump’s new reserve program as a sham to reward Republican donors.

During the election campaign, Trump’s team received huge donations from the crypto sector.

Ripple donated at least $49 million to Fairshake, a pro-crypto political action committee that supported the Republican party during the campaign. The company even donated over $5 million to the inauguration fund of Trump.

Ripple’s XRP is one of the cryptos expected to be included in the US Crypto Strategic Reserve.