Ripple (XRP) Catches a Break as Trump's Team Eyes It as a Key Player in Building a Bitcoin Reserve

Reports suggest that President Donald Trump's team is eyeing XRP as a key player in building a powerhouse Bitcoin (BTC) reserve

President Donald Trump's administration is reportedly considering a proposal to build a powerhouse Bitcoin (BTC) reserve, with suggestions that XRP could play a key role in this endeavor.

According to a report by SmartAsset, a five-page proposal submitted to the US Securities and Exchange Commission (SEC) suggests that XRP could be used to boost the US financial system.

The plan, written by Maximilian Staudinger, claims that integrating XRP could unlock $1.5 trillion in liquidity, which could then be used to buy Bitcoin. However, this idea faces major regulatory hurdles, and it remains unclear if the government will take it seriously.

How XRP Could Free Up Trapped Funds

The proposal suggests that the US should consider using XRP to free up capital stuck in Nostro accounts. These accounts, used for cross-border transactions, are said to hold about $27 trillion globally, with around $5 trillion belonging to US banks.

By using XRP, Staudinger believes that $1.5 trillion could be released and redirected toward Bitcoin purchases. He notes that this liquidity could be used to buy approximately 25 million Bitcoin at a price of $60,000 per coin.

However, this claim seems impossible given that Bitcoin's total supply is only 21 million. Additionally, the proposal suggests that using XRP could save the US up to $7.5 billion in transaction fees annually and make government payments, like Social Security and tax refunds, faster and cheaper.

A Structured Crypto Reserve System

Staudinger proposes a structured crypto reserve system for the US, with Bitcoin forming the central asset due to its liquidity and price stability. He suggests that Solana and Cardano could be used for government applications, highlighting Solana's speed and low transaction costs and Cardano's programmability and smart contract capabilities.

However, he maintains that XRP is the most important asset for handling financial transactions due to its global reach and liquidity. He proposes that the US could begin integrating XRP within six months to realize its full potential.

Regulatory Challenges and Timelines

Despite highlighting the benefits of XRP, Staudinger acknowledges the challenges posed by its unclear regulatory status. He urges the SEC to classify XRP as a payment asset instead of a security and calls on the Department of Justice to lift restrictions preventing banks from using XRP.

To speed up the process, he suggests a presidential executive order to bypass regulatory delays. His plan includes two timelines: a standard 24-month rollout with standard regulatory approval, government payments, and bank adoption, or opting for a fast-track six-to-twelve month timeline using executive orders and Federal Reserve mandates for quick XRP integration.

While ambitious, the fast-track approach could work given that Ripple has been building its global liquidity network for years and has existing relationships with major financial institutions.

Will This Proposal Go Anywhere?

While the idea sounds interesting, independent proposals like this usually don't gain much traction unless backed by major financial institutions or government officials. Without strong support, this remains a bold idea rather than a plan that the US is likely to adopt anytime soon.