President Donald Trump signed an executive order Thursday establishing a government reserve of bitcoin, a key marker in the cryptocurrency's journey towards possible mainstream acceptance.
Under Trump's new order, the U.S. government will retain the estimated 200,000 bitcoin it's already seized in criminal and civil proceedings, according to Trump's “crypto czar” David Sacks.
“The U.S. will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value. The Reserve is like a digital Fort Knox for the cryptocurrency often called ‘digital gold,’” Sacks said on social media.
The executive order calls for a “full accounting” of the government's bitcoin holdings, which Sacks said have never been fully audited. He added that the U.S. government has previously sold off about 195,000 bitcoin over the last decade for $366 million. He said those bitcoins would be worth about $17 billion if the government hadn't sold them.
Sacks said the order allows for the Treasury and Commerce Departments “to develop budget-neutral strategies for acquiring additional bitcoin.”
Once a skeptic who said a few years ago that bitcoin “ seems like a scam,” Trump has embraced digital currencies and leaned into his unofficial role as the “ crypto president ” in ways that can both help the crypto industry and enrich himself and his family. Wealthy players in the crypto industry, who felt unfairly targeted by the Biden administration, spent heavily to help Trump win last year's election.
Establishing a bitcoin reserve was one of several crypto-related promises Trump made on the campaign trail last year. Trump is also pushing Congress to pass industry-friendly legislation, and under his administration the Securities and Exchange Commission has started dropping enforcement actions it had taken against some major crypto companies. On Friday, Trump is set to host many key industry leaders at a White House “Crypto Summit.”
Bitcoin is the oldest and most popular cryptocurrency. Created in response to the 2008 financial crisis by an anonymous person or persons, bitcoin has blossomed from an experiment by libertarian cryptography enthusiasts into an asset with a market cap of about $1.7 trillion. While it hasn’t taken off as a way to pay for everyday things, bitcoin has found popularity as a store of value that’s not controlled by banks, governments or other powerful entities.
Bitcoin’s supply is capped at 21 million coins, a built-in scarcity that supporters say makes it a great hedge against inflation. Critics have long said bitcoin lacks any inherent value, but it’s so far defied naysayers with remarkable price increases. Some supporters of a strategic bitcoin reserve said it could one day help pay off the U.S. national debt.