The cryptocurrency industry is making a last-ditch effort to convince the incoming Trump administration to adopt a plan that would see the government purchase and hold billions of dollars in Bitcoin, according to multiple people with direct knowledge of the matter.
The proposal, which was first floated by Trump on the campaign trail last summer, would see the government allocate a portion of its reserves to purchasing the cryptocurrency. Trump has said that the move would help reduce the national debt and serve as a “permanent national asset to benefit all Americans.”
While the details of the plan are still being debated and Trump could ultimately decide to abandon it, several cryptocurrency executives have spent the past few weeks meeting with administration officials and cabinet nominees to discuss the proposal and try to convince them of its merits.
The executives have also been providing input to David Sacks, a venture capitalist who was appointed by Trump to oversee crypto and artificial intelligence, on a possible executive order that would cover several areas of crypto policy, according to three people with knowledge of the matter. The Bitcoin stockpile is part of those discussions, two of the people said.
The talks, which have been described as “very positive” by one person involved, are now focusing on how to pay for the Bitcoin stockpile, two people said. One possibility that has been discussed is using a portion of the proceeds from the government's planned sale of Fannie Mae and Freddie Mac stock, according to one person.
The Trump administration has already shown a willingness to intervene in the cryptocurrency markets. In December, Treasury Secretary Steven Mnuchin announced that the government would be taking steps to crack down on illicit activity in the crypto sector, including money laundering and terrorist financing.
The administration's stance on cryptocurrencies has been closely watched by the industry, which is hoping for a light-touch approach that would allow for innovation to flourish. Several cryptocurrency executives have met with Trump and his advisers in recent months to discuss a range of issues, including the possibility of the government purchasing Bitcoin.
If the Trump administration were to decide to go ahead with the plan, it would mark a historic shift in the government's approach to cryptocurrencies. Up until now, the government has largely taken a hands-off approach, leaving the regulation of cryptocurrencies to the states and the Commodities Futures Trading Commission (CFTC).
However, the government's role in the crypto sector could expand significantly if the Trump administration decides to follow through on its plan to purchase and hold Bitcoin. Such a move would likely have a profound impact on the cryptocurrency markets and could help to legitimize cryptocurrencies in the eyes of mainstream investors.
