President Trump held a summit on Friday with cryptocurrency fans where he presented his national stocks establishment plan for Bitcoin and other cryptographic tokens. What could go wrong?
Mr. Trump’s new decree issued Thursday orders the Treasury Department to take care and preserve the assets of the Bitcoin government and other cryptocurrencies that agencies seize in the context of surveys on reprehensible acts. Its declared objective is to create a cryptographic version of Fort Knox, where American gold reserves are stored.
David Sacks, the cryptocurrency of the White House cryptocurrency, said that the US government has sold around 195,000 Bitcoin in the last decade for $ 366 million, which is worth around $ 17 billion today. He estimates that federal agencies now have some 200,000 bitcoins – with $ 16.7 billion at the current price, but said: “There has never been a complete audit.
The order of Mr. Trump requires such an audit. The treasure would then manage the government’s hiding place as reserve agents, similar to gold and foreign currencies. The treasure would determine “responsible management” separately for other tokens like Ripple and Ethereum.
The reserves of the US dollar provide liquidity and facilitate payments with the rest of the world. Bitcoin does not do so. While Mr. Trump describes Bitcoin as “digital gold”, many countries do not recognize or accept it as a legal. Although gold has been used as a wealth reserve for centuries, Bitcoin has been around for 16 years.
Its price is also very volatile. Investors sold Bitcoin last week because they have other risky assets in a context of increasing uncertainty of trade. Bitcoin prices and other tokens on Thursday fell after Mr. Trump published his decree, apparently because cryptographic investors hoped that he would do more to strengthen their speculative cryptographic bets.
Its order orders the Treasury and the Commerce Department to “develop strategies” to acquire more bitcoin which “neutral budgetary and do not impose additional costs on the taxpayers of the United States”. This ostensibly means that the treasure will not issue a debt to buy bitcoin, but the order always invites the government’s mischief.
The assets seized in civil and criminal confiscations are generally referred to the victims or sold with the product given to the Treasury to reduce the budget deficit. The Trump plan is to keep the tokens confiscated as investments, which could then be sold to finance the prerogatives of the expenses of a president. The future presidents of the two parties could attack the stock to bypass the Congress for expenses.
The establishment of national crypto reserves also invites the abuse of the government. The Institute for Justice told how local police abused civil confiscation laws to grasp the assets even when there was no distribution. What prevents the Ministry of Justice from doing the same with cryptocurrencies to strengthen Treasury stocks? The treasure could even buy tokens supported by the political donors of the ruling party to increase their price.
A reserve of government crypto is useless while creating an opportunity for bad political behavior. Let private investors speculate to speculate whatever they want without the government having a participation in the prices of the cryptocurrency.
