A version of this story appeared in the What Matters of CNN. To get it in your reception box, register for free here.
Cnn
–
When President Donald Trump tackles the Capitol Hill nation on Tuesday, he will have the first opportunity to sell Americans and the congress on his new proposal that the United States must create a strategic cryptocurrency reserve.
This is a plan – unveiled on Sunday in a pair of publications on social networks more than an hour apart – which will raise obvious questions of conflict of interest, as for Trump and his cryptographic tsar, and could also feed a brewing plot on Fort Knox.
The first post mentioned three smaller and less known cryptocurrencies – XRP, Solana and Cardano, temporarily reversing their prices.
More than an hour later, he added that the largest and most famous cryptocurrencies, Bitcoin and Ether, would also be involved.
Trump has been talking about such a reserve for some time, part of his commitment to the United States the “cryptographic capital of the world”. Beyond the political aspect of crypto, it also has a personal interest.
The company that has Trump’s social media network and where Trump is the largest shareholder, recently made its plans clear to invest 250 billion dollars in the cryptocurrency industry.
In addition, the Securities and Exchange Commission last week abandoned a civil fraud case against Justin Sun, a Chinese businessman who pumped $ 75 million in a crypto token that could benefit Trump’s family on the road. As Allison Morrow from CNN noted at the time, it was an 180 for the agency from the Biden administration, who worked to regulate cryptocurrency.
The value of cryptocurrencies like Bitcoin has increased after the Trump elections, but has blocked in recent weeks. However, Trump’s distance from the regulation is exactly what the libertarian technological billionaires who supported his campaign want.
Trump has appointed one of them, David Sacks, to be a crypto and an AI tsar in his administration. Although Sacks has not published a financial disclosure and the terms of his job are not clear, after Trump’s messages on a strategic reserve increased the value of cryptocurrencies, Sacks said on x that he had sold all his cryptocurrencies before joining the administration. His company Craft Ventures, however, is invested in Bitwise, an asset manager who offers crypto index funds.
Evangelists for a cryptocurrency reserve say that the United States taking a daring position in Bitcoin could reimburse the national debt at some point in the future.
Investor Michael Saylor, who said that his company Microstrategy had more than $ 50 billion in Bitcoin, said on CNBC on Monday if the United States bought 10 to 20% of the Bitcoin network in the world for a long time – or more decades – it is ultimately several billion dollars.
“What is convincing is that the United States is taking a stand in the economy of emerging cryptography-if it buys 10, 20% of the Bitcoin network, we will repay the national debt, so why not would it be in the interest of the United States?”
But for each Bitcoin evangelist, there is a academic Or banker of the whole political spectrum which will underline that the investments of cryptocurrencies could just as well increase in smoke, which would be unhappy to arrive at the dollars of taxpayers.
Trump argued that the United States can simply take more than 200,000 Bitcoin which he has currently seized with criminal and civil actions and start building from there.
There are other proposals, such as that of senator Cynthia Lummis, a Wyoming Republican, to reassign money from the Federal Reserve to buy bitcoin or to take advantage of the American government’s gold reserves to collect funds for the Bitcoin reserve.
Trump and Musk recently talked about planning a trip to Fort Knox to make sure that gold is still there, nourishing a conspiracy theory. During the first Trump administration, CNN used a request for public files to obtain photos of the secretary at the time, Steven Mnuchin, and the former head of the majority of the Senate, Mitch McConnell, posing with gold bricks in the jump. McConnell even wrote his name on the wall.
It is not clear that there will be an appetite to the congress to tinker with the gold reserve or otherwise spend money on taxpayers to buy bitcoin, but there will be an opportunity for initiates to speak on this subject when Trump and Sacks will organize a Crypto Friday at the White House for “founders, CEO and investors of the cryptography industry”.
Senator Patty Murray, a Washington Democrat, complains about x What Trump should not try to invest Americans’ money in Bitcoin at the same time as he tries to reduce government size.
“Although he is choking on cancer research and dismissed researchers from VA, the president uses your dollars taxpayers to buy crypto and enrich his personal allies,” she said.
