There is much discussion about the possibility of a U.S. strategic reserve of Bitcoin. Senator Cynthia Lummis, who attended the Bitcoin conference, is a strong supporter of the idea.
Donald Trump also appears to be considering this option and has promised not to sell US Bitcoin reserves if he becomes president.
But what exactly does the US Strategic Bitcoin Reserve entail? Let’s take a closer look.
Trump studies Bitcoin reserves
During the annual Bitcoin conference in Nashville, Trump announced that the United States would hold indefinitely the remaining 200,000 bitcoins (worth $14.85 billion) that authorities had seized. Although he did not explicitly mention the creation of an official strategic reserve, the move suggests that Bitcoin could play a larger role in the U.S. national reserve.
Currently, the United States has several types of reserve assets, the largest of which is gold. The U.S. Treasury holds a whopping $608.35 billion in gold. In addition, the U.S. government holds $166.21 billion in Special Drawing Rights from the International Monetary Fund and $35.2 billion in foreign currencies, such as the euro and the yen. The United States has a total of more than $800 billion in reserves.
1 million bitcoin
Senator Lummis proposes that the United States hold 5% of all bitcoin ever mined, or 1 million bitcoins, as a strategic reserve. If implemented, this plan would make bitcoin the largest reserve asset in the United States after gold and special drawing rights.
A US Bitcoin reserve would be a historic milestone for Bitcoin. Ten years ago, no one would have imagined that we would be speculating on this idea today. While the likelihood of this becoming a reality in the short term seems slim, the US government already owns a significant amount of Bitcoin.
The currently seized Bitcoins represent just over 2% of total US reserves, which is no small feat. The future will show how seriously we should take the idea of Bitcoin as a government reserve asset.
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