The establishment of a Strategic Bitcoin BTC/USD Reserve and a Digital Asset Stockpile in the U.S. represents a new paradigm

While Bitcoin will have its own reserve, the Digital Asset Stockpile is expected to have Ethereum ETH/USD, XRP XRP/USD, Cardano ADA/USD

The establishment of a Strategic Bitcoin BTC/USD Reserve and a Digital Asset Stockpile in the U.S. represents a new paradigm in the evolution of cryptocurrencies and one that could influence monetary policy in countries around the world.

While Bitcoin will have its own reserve, the Digital Asset Stockpile is expected to have Ethereum ETH/USD, XRP XRP/USD, Cardano ADA/USD, and Solana SOL/USD, according to Trump’s earlier announcement.

The connecting thread among them all? They are the largest cryptocurrencies by market capitalization. In fact, excluding stablecoins, the reserve will contain five of the top six coins in terms of valuation.

But, if it was so obvious, the next logical question is why BNB Coin BNB/USD, the fourth-largest cryptocurrency, was not included in the reserve.

Several analysts that Benzinga spoke to blamed it on the ‘China' angle.

Ties With An ‘Unfriendly’ Trade Partner

"President Trump's decision to omit Binance Coin from the U.S. Crypto Reserve, despite its substantial market capitalization, may well have been influenced by the ongoing trade tensions between the U.S. and China, as Binance has strong ties to China," said Shant Kevonian, CEO and founder of Web3 email platform EtherMail.

It's worth noting that Binance was initially headquartered in China but moved out before the Chinese government restricted cryptocurrency trading in the country. As of this writing, the company has no official headquarters.

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Kadan Stadelmann, blockchain developer and Chief Technology Officer of Komodo Platform, also emphasized the Chinese nationality of Yi He, the company's little-known co-founder, apart from Changpeng "CZ" Zhao.

It's not news that Trump champions an "America First" policy, placing it at the center of his political rhetoric. He has spoken about putting the U.S. at the forefront of cryptocurrency innovation and avoiding ceding the space to China.

However, the China link wasn't the only cause for concern.

Is BNB CZ-Tainted?

"BNB was started and majority-owned by CZ—in fact, that’s how Binance funded itself for the 2017 ICO. CZ was recently jailed by the U.S. (Biden administration) for improper KYC, so there’s no way they’d include it in a strategic reserve," said Michael Terpin, CEO of Transform Ventures and author of the book Bitcoin Supercycle.

Indeed, CZ served a four-month prison sentence for anti-money laundering violations, paid a $50 million fine, and stepped down from the CEO's role.

Moreover, according to a Forbes report, he owns an estimated 94 million BNB tokens, roughly 64% of the total circulating supply.

Binance has yet to respond to Benzinga's request for comment on the exclusion from the reserve.

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Litecoin’s Privacy: The Reason Behind Exclusion?

Another popular coin whose exclusion might have surprised some was Litecoin LTC/USD.

After all, the altcoin is expected to be the next exchange-traded fund on Wall Street after Bitcoin and Ethereum, with characteristics deemed "very" similar to the apex cryptocurrency.

So, what happened?

Stadelmann believes a privacy-friendly update executed by the Litecoin network in 2022 could be the reason.

"Perhaps Litecoin's 2022 MimbleWimble update, which allows for private transactions where only the sender and receiver know the details, gives Trump pause," Stadelmann told Benzinga.

Notably, the newly added privacy features created a storm, leading to delisting from South Korean cryptocurrency exchanges over conflict with the country's reporting requirements.

In its defense. Litecoin has stated that MimbleWimble is an optional feature.

A spokesperson from the Litecoin Foundation backed LTC's inclusion in a U.S. cryptocurrency reserve and expressed optimism that things could change for the better.

"We are hopeful that thoughtful consideration is given to projects that can provide long-term value for a crypto reserve, and we are confident that if a crypto reserve is passed in Congress, that Litecoin would inevitably be added, given its similar characteristics to Bitcoin and value proposition."

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