The Trump Administration Is Evaluating a Bitcoin Reserve

The idea? Accumulate Bitcoin as a strategic asset, similar to gold, to hedge against currency volatility and global economic shifts.

President Trump's administration is reportedly considering integrating Bitcoin into national economic policy by creating a reserve, according to David Sacks, the recently appointed AI and Crypto Czar.

In an interview with CNBC, Sacks said that the administration is "taking a serious look" at the feasibility of a U.S. Bitcoin Reserve. The idea, he explained, is to accumulate Bitcoin as a strategic asset, much like gold, to hedge against currency volatility and global economic shifts.

"We're looking at the role of Bitcoin in particular, and whether or not it makes sense for the U.S. to have a Bitcoin reserve," Sacks said. "We're having those conversations right now."

While Sacks did not provide any specific details about the initiative, the move signals that the U.S. may be preparing for a future where digital assets play a much larger role in monetary policy. Countries like El Salvador have already made Bitcoin legal tender, and some U.S. policymakers see an opportunity to establish America as a leader in the space.

"The U.S. has been talking about crypto for a long time, but they haven't really done anything," said Mati Greenspan, founder of Quantum Economics. "This is the first time that we're hearing something concrete from the U.S. government on the matter."

If the Bitcoin Reserve plan moves forward, it could have a significant impact on global perceptions of Bitcoin, potentially elevating it to an even more legitimate asset class, Greenspan added.

In parallel with the administration's crypto moves, Congress is also making an effort to bring regulatory clarity to stablecoins.

On Thursday, Senator Bill Hagerty (R-TN) introduced the GENIUS Act, a bill designed to set clear rules for stablecoin issuance and operation in the U.S. The bill aims to provide a legal framework for companies offering digital dollar alternatives.

"Stablecoins present a clear opportunity to advance financial inclusion, drive down the cost of sending money, and help Americans save for the future," Hagerty said in a statement. "This bill will ensure that stablecoins are issued and operated in a safe and sound manner, protecting consumers and the financial system."

Stablecoins like USDT (Tether) and USDC (USD Coin) have seen explosive growth in recent years, but they exist in a gray area of financial regulation. Some regulators have warned that stablecoins could pose risks to the financial system if they are not properly overseen.

The GENIUS Act would require stablecoin issuers to be licensed by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) and to maintain reserves that are fully backed by cash, cash equivalents, U.S. Treasury securities, or a combination of the three.

The bill would also prohibit stablecoin issuers from lending or investing any portion of their reserves and would require them to be audited by an independent accounting firm at least once a year.

"The bill will ensure that stablecoins are issued and operated in a safe and sound manner, protecting consumers and the financial system," Hagerty added.

The GENIUS Act is the latest in a series of attempts by Congress to regulate stablecoins. In 2022, the House of Representatives passed the Stablecoin Transparency Act, which would have required stablecoin issuers to register with the Securities and Exchange Commission (SEC).

However, the bill stalled in the Senate, and it is unclear whether the GENIUS Act will fare any better. The bill faces opposition from some crypto industry groups, who argue that it would impose overly burdensome regulations on stablecoins.

"The bill would create a new class of digital assets that are subject to unique regulations," said Kristin Smith, executive director of the Blockchain Association, a crypto industry trade group. "This approach is unnecessarily complex and could stifle innovation in the digital asset space."

The Biden administration has also been working on stablecoin regulation, and the Treasury Department is expected to release a report on the issue in the coming weeks. The administration is reportedly considering a range of options, including regulating stablecoins as securities or as a new type of financial product.

The outcome of these efforts will have a major impact on the future of stablecoins in the U.S. If Congress or the administration succeeds in passing legislation to regulate stablecoins, it could help integrate them into mainstream finance, making them a more reliable and widely accepted means of digital payment.