United States President Donald Trump on Sunday announced his government would create a national strategic crypto reserve that would include five cryptocurrencies, adding he would make the US “the crypto capital of the world”.
In a statement on his Truth Social network, Trump said a crypto working group, which was set up following his inauguration in January, is pressing forward with the reserve’s creation, fulfilling promises he first made to crypto lobbyists during his election campaign.
Following his Sunday announcement, values of the named currencies, including Bitcoin, soared, following what has been a weeks-long slump.
The move comes before a first-ever White House Crypto Summit on Friday and represents a considerable turnaround in US policy. Former President Joe Biden’s administration cracked down on the industry because of suspicions of fraudulent transactions. Trump himself was a crypto skeptic during his first term as president. At the time, he had called Bitcoin – the largest cryptocurrency – a “scam”.
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In his Sunday announcement, though, Trump criticised the Biden-era policies, calling them “corrupt”.
Trump said a “crypto reserve will elevate this critical industry after years of corrupt attacks by the Biden administration…I will make sure the US is the crypto capital of the world. We are making America great again.”
Here’s what you need to know about the new US crypto reserve:
What will the US crypto reserve include?
In his posts on Sunday, Trump initially mentioned that smaller currencies – XRP, Cardano, and Solana – would form part of the new national crypto stockpiles.
About an hour later, however, the president in a separate post said “and obviously, BTC and ETH…will be at the heart of the Reserve,” referring to Bitcoin and Ethereum, the top two cryptocurrencies by market value.
Markets immediately reacted favourably to the post with Cardano jumping about 60 percent to $1.25 from a previous $0.65, according to Coinbase crypto exchange – although by Monday it had again settled to about $0.97. Solana increased from about $150 to $170 and XRP jumped from $2.25 to $3, both currencies surging at rates of about 12 and 20 percent, respectively.
Meanwhile, Bitcoin and Ethereum gained more than 10 percent, with Bitcoin reaching $94,000 from a previous $86,000.
During his campaign, Trump courted the crypto industry and promised aggressive measures in support of the currencies once in power. Following his election win in November, the cryptocurrency market witnessed unprecedented surges – Bitcoin, for example, reached an all-time high of $109,000. However, the market slowed in the weeks after.
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Trump and First Lady Melania Trump in January launched their own meme coins – digital currencies inspired by viral trends but that lack the financial or technological backing of actual cryptocurrencies.
Elon Musk, who leads Trump’s government efficiency drive, also frequently promotes cryptocurrencies on his social media network X (previously Twitter).
What could be the aim behind a crypto reserve?
Owning digital currencies like Bitcoin is increasingly seen by governments as an alternative store of value, such as gold, and as a hedge against inflation. But some experts say the crypto market is highly volatile and witnesses price swings making it a risky bet as an alternative store of value — especially when compared against gold.
Many countries that hold digital currencies seized in criminal investigations would be able to use cryptocurrencies as legal tender.
Switzerland plans to decide on crypto reserves after a public referendum, while Brazil, Germany, Hong Kong, Poland and Russia are considering or taking steps to build them.
The US government currently has the largest cryptocurrency holding of any country – 200,000 Bitcoin – and Trump’s stance is seen as increasingly lending further credibility to different coins. If plans for the US crypto reserve go forward, more countries will likely wade into the game because of the US’s outsized influence as the world’s largest economy.
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Trump’s crypto push will position America ahead of the curve, giving it considerable sway over how international crypto regulations emerge later on.
And if the US government, through a reserve, holds a substantial chunk of the global volume of crypto tokens, it would be in a position to reduce the price volatilty curtentyluy associated with these digital currencies.
In July 2024, Republican Senator Cynthia Lummis introduced a Bitcoin Act in Congress, which mandated all government-held Bitcoin to be transferred to the US Treasury and pushed for the establishment of a crypto reserve. Lummis also said such a reserve would help the US manage its current Bitcoin holdings in a transparent manner.
“Bitcoin is transforming not only our country but the world and becoming the first developed nation to use Bitcoin as a savings technology secures our position as a global leader in financial innovation,” she said.
The bill is still in consideration.
What other strategic reserves does the US hold?
The only other strategic or emergency reserves the US owns are its huge oil stocks, known as the Strategic Petroleum Reserve (SPR), in Louisiana and Texas.
The US government describes the reserves as “the world’s largest supply of emergency crude oil”. Up to 714 million barrels, the crude is stored in underground salt caverns located in four separate sites on the Gulf of Mexico, according to the US government. It is maintained by the US Department of Energy.
Rarely does the US need to access its crude reserves. The last time was in June 2011, when President Barack Obama directed that 30 million barrels be released for sale to fill in gaps caused by conflict in Libya, a major oil-producing country. The reserves were first established in 1975 after Arab countries announced an oil embargo on countries that supported Israel’s 1973 war on Syria and Egypt.
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Do other countries have crypto reserves?
Only three currently treat cryptocurrencies as legal tender:
- El Salvador: Since 2021, the government of Nayib Bukele has adopted Bitcoin as legal tender, making it the first country to do so. However, researchers from Yale found in a January 2024 study that the coin wasn’t seeing much use. In January, the government downgraded Bitcoin rules, making it no longer useful for paying taxes and state bills. El Salvador currently has about 6,088 Bitcoin in its reserves, which are estimated at $558m.
- Central African Republic: In 2022, CAR adopted Bitcoin as legal tender but it’s unclear how much the country has in its reserves.
- Bhutan: In January, Bhutan’s Gelephu Mindfulness City adopted a policy of holding cryptocurrencies such as Bitcoin and Ethereum in strategic reserves. Bhutan mines and owns about 11,000 Bitcoin, valued at $1.1bn according to Arkham Exchange.
Meanwhile, several countries hold currencies like Bitcoin, often seized through law enforcement action in connection with criminal activity. Country holdings include:
- United States: Has about 200,000 Bitcoin, the highest of any country in the world, valued at about $16.7 billion, according to Bitcoin Treasuries, a trading website.
- China: Crypto transactions are currently banned in China because the government has struggled to regulate them. The Chinese government is working on creating its own digital currency – which would be backed by the Chinese central bank. Currently, China holds about 194,000 Bitcoin, valued at about $16.2 billion (as of March 4), which was seized from Ponzi scheme companies.
- United Kingdom: The UK government holds about 61 Bitcoin seized from international money laundering networks, according to crypto firm Binance. That’s an estimated $5m.
- Ukraine: Holds about 1200 Bitcoin from public donations due to the ongoing Russian war on Ukraine. That’s valued at about $100m.
- Finland: Owns about 890 Bitcoin – an estimated $74m – that was seized during narcotics trafficking investigations.
- India: Owns 450 Bitcoin seized during crypto fraud investigations, estimated at $37m.
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