US President Donald Trump added on Sunday that his government will create a national strategic cryptographic preparation that includes five cryptocurrencies, making the United States the “crypto capital of the world.”
In his statement on the true social network, Trump said the crypto working group set up after the inauguration in January is moving forward with creating a sanctuary and fulfilling the first promise he made to crypto lobbyists during his campaign.
Following his Sunday announcement, the value of the nominated currencies, including Bitcoin, has skyrocketed after what had been a recession for weeks.
The move, which took place before the first White House crypto summit on Friday, represents a substantial turnaround in US policy. Former President Joe Biden’s administration cracked down on the industry for alleged fraudulent trade. Trump himself was a crypto skeptic during his first term as president. At the time, he called Bitcoin (the biggest cryptocurrency) a “scam.”
But in his Sunday announcement, Trump criticized Biden-era policies and called them “corruption.”
“The Crypto Reserve will boost this important industry after years of corrupt attacks by the Biden administration. We confirm that the United States is the world’s crypto capital. We are making America great again,” Trump said.
Here’s what you need to know about the new US crypto protected area:
What do US cryptographic protected areas include?
In his post on Sunday, Trump initially said small currencies, XRP, Cardano and Solana, will form part of the new national crypto stockpile.
But about an hour later, the president in another post said, “Obviously, BTC and ETH will be at the heart of the reserve,” referring to Bitcoin and Ethereum, referring to them as the top two cryptocurrencies by market value.
According to Coinbase Crypto Exchange, the market responded favorably to the post, moving from about 60% to $1.25 from the previous $0.65, but by Monday it had settled to about $0.97. Solana rose from around $150 to $170, while XRP jumped from $2.25 to $3. Both currencies spiked at around 12% and 20% rates, respectively.
Meanwhile, Bitcoin and Ethereum won over 10%, with Bitcoin reaching $94,000 from the previous $86,000.
During his campaign, Trump courted the crypto industry and pledged aggressive measures to support currency once in power. After winning the November election, the cryptocurrency market witnessed an unprecedented surge. Bitcoin, for example, reached an all-time high of $109,000. However, a few weeks later the market slowed down.
In January, Trump Trump and first lady Melania Trump launched their own meme coins. This is a digital currency inspired by viral trends, but does not have financial or technical support for the actual cryptocurrency.
Elon Musk, who leads Trump’s government efficiency drive, frequently promotes cryptocurrency on social media network X (formerly Twitter).
What is the purpose behind a cryptographic sanctuary?
Owning of digital currencies like Bitcoin is increasingly seen by the government as a valuable alternative reservoir such as gold and as a hedge against inflation. However, some experts say that the crypto market is very unstable, witnessing price fluctuations, making it a risky bet as a valuable alternative, especially when compared to gold.
Many countries that hold digital currencies seized in criminal investigations could use cryptocurrencies as fiat currency.
Switzerland is planning to decide on crypto preparations after the referendum, and Brazil, Germany, Hong Kong, Poland and Russia are considering or proceeding with measures to build them.
The US government currently has the largest cryptocurrency holdings (200,000 Bitcoin) in any country. Trump’s stance is seen as lending more credibility to a variety of coins. If plans for US crypto-protected areas move forward, more countries could be involved in the game due to the impact that the US has been affected as the world’s largest economy.
Trump’s crypto push gives a considerable shaking about how America sits ahead of the curve and international crypto regulations emerged later.
And if the US government holds a significant portion of the world’s volume of crypto tokens through its reserves, it is in a position to reduce the unstable curtain tilloo in prices associated with these digital currencies.
In July 2024, Republican Sen. Cynthia Lumis introduced Bitcoin Act to Congress. This required the government to transfer all Bitcoin held by the government to the US Treasury Department and promoted the establishment of cryptocurrency reserves. Lumis also said such reserves would help the US manage its current Bitcoin holdings in a transparent way.
“Bitcoin has transformed not only our country, but the world, becoming the first developed country to use Bitcoin as a savings technology, securing its position as a global leader in financial innovation,” she said.
The bill is still being considered.
What other strategic reserves does the US hold?
The only other strategic or emergency owned by the US is the huge oil stock known as the Strategic Oil Reserve (SPR) of Louisiana and Texas.
The US government describes its reserves as “the world’s largest emergency supply of crude oil.” According to the US government, up to 714 million barrels of crude oil are stored in underground salt caves located in four separate locations in the Gulf of Mexico. Maintained by the US Department of Energy.
The US rarely needs access to its crude oil reserves. The last one was in June 2011. President Barack Obama has directed that he will be released to sell 30 million barrels to fill the gap caused by the conflict in Libya, a major oil producer. The reserve was first established in 1975 after Arab countries announced an oil embargo in countries supporting Israel’s 1973 war with Syria and Egypt.
Do other countries have cryptographic preparations?
Currently, only three people treat cryptocurrencies as fiat currency.
El Salvador: Since 2021, the Naive Buquere government has adopted Bitcoin as its fiat currency, and was the first to do so. However, Yale researchers found in a January 2024 survey that the coins were less used. In January, the government downgraded Bitcoin rules, no longer helping to pay taxes and state bills. El Salvador currently has around 6,088 bitcoins in the reserve, estimated at $558 million. Central African Republic: In 2022, cars adopted Bitcoin as their fiat currency, but it is unclear how much reserves the country has. Bhutan: In January, Bhutan’s Jerek Mindfulness City adopted a policy to hold cryptocurrencies such as Bitcoin and Ethereum in its strategic reserves. It owns the Bhutan mine and around 11,000 bitcoins, which are worth $1.1 billion, according to Arkham Exchange.
Meanwhile, some countries have currencies like Bitcoin, which are often seized through law enforcement actions in connection with criminal activity. Country Holdings include:
US: There is around 200,000 Bitcoin, the highest amount in any country in the world, valued at around $16.7 billion, according to trading website Bitcoin Treasuries. China: Cryptocurrency transactions are currently banned in China as the government struggles to regulate them. The Chinese government is working to create its own digital currency, supported by the Central Bank of China. Currently, China has around 194,000 bitcoins, seized from Ponzi Scheme Companies for around $16.2 billion (as of March 4). UK: The UK government owns around 61 bitcoins seized from international money laundering networks, according to Crypto Firm Binance. That’s an estimated $5 million. Ukraine: Due to the ongoing Russian war in Ukraine, it holds around 1,200 bitcoins from official donations. This is valued at around $100 million. Finland: It owns approximately 890 bitcoins (estimated $74 million) seized during a drug trafficking investigation. India: It owns 450 Bitcoins seized during a crypto fraud investigation, estimated at $37 million.
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