Trump’s Talk of Bitcoin Reserve for the U.S. Leaves Industry Waiting for More Details

A strategic US bitcoin stockpile is now among presidential candidate Donald Trump’s campaign promises, and Senator Cynthia Lummis is currently working on a bill to do just that.

That effort is still short on details, and its near-term chances in Congress are likely to be limited.

Former President Donald Trump, a sitting U.S. senator and some of the biggest names in bitcoin {{BTC}} investment appear to agree that the U.S. should start building a reserve of the most important crypto token. But concrete details are scarce and it’s not an idea that’s likely to be implemented anytime soon.

Trump didn’t explicitly go into any specifics about hoarding Bitcoin when he spoke on stage at Bitcoin 2024, only saying that the U.S. should hold everything it has through current seizures and anything it acquires in the future as some sort of reserve.

“For too long, our government has violated the cardinal rule that every bitcoiner knows by heart: Never sell your bitcoin,” Trump told a crowd of enthusiastic bitcoin enthusiasts on Saturday. The Republican candidate for the 2024 presidential election said his policy in his second term would be to hold existing government assets as “the core of a strategic national bitcoin stockpile,” which he said would begin to “transform this tremendous wealth into a permanent national asset that will benefit all Americans.”

Read More: Donald Trump’s Own Words – Partial Transcript of Bitcoin 2024 Speech

Sen. Cynthia Lummis (R-Wyo.) said a bill she is working on at the conference would set aside the more than 200,000 Bitcoins the country already has and add to it by converting excess reserves in the Federal Reserve system until the U.S. reaches one million coins, about 5% of the supply.

“This is our Louisiana Purchase moment,” Lummis told an enthusiastic crowd at the Bitcoin 2024 event, referring to the treaty that added vast territories to the post-colonial United States. “Thank you, Bitcoin.”

The current holdings of coins by the U.S. government came via seizures from individuals or entities associated with criminal activity. Almost half of the coins—about 95,000—came from two men accused of laundering funds stolen in the hack of crypto exchange Bitfinex.

Lummis said the proposed reserve would be used to reduce or eliminate the U.S. national debt, but he did not share details about how it would be used for that purpose, beyond the basic math that increasing U.S. government wealth generally equates to decreasing debt. There was no immediate word from the senator’s office; he is working to draft a bill and get other senators involved. A spokesperson for the lawmaker did not respond to a request for comment.

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As the industry struggled to digest the idea on Monday, U.S. authorities moved a large portion of the government’s roughly $2 billion worth of bitcoin, linked to the Silk Road website seizures. It’s unclear what happened with the assets and whether they were a precursor to the sale. The government’s supply comes from criminal cases, and the U.S. Marshals Service is responsible for liquidating assets in the U.S., but that has proven to be a challenge.

Throughout its history, the United States has built up strategic stocks of vital commodities such as gold, oil, grain, and helium for various reasons.

“For the U.S. to accept Bitcoin as a strategic reserve, more work will be needed, including determining how much should be held as reserves and the basis for that threshold, how to acquire it, how and where to store it, when and under what conditions to use it, which entity will be responsible, the timetable for implementation, and many other issues,” Rahul Mewawalla, CEO of bitcoin mining company Mawson Infrastructure Group, said in an emailed statement. Answering these questions “can be challenging,” and he said forming a council of industry participants could help.

Such a significant and potentially controversial bill as Lummis has in mind would have little runway to advance in the current congressional session, which ends in January. The Democratic-run Senate has yet to adopt enough crypto legislation to bring any of the current bills to a vote, and the 2024 election in November promises to turn every policy question into a political debate. A bill by Lummis, a Republican, could potentially fare better in the next session if his party wins a majority in that chamber, but Senate measures typically need bipartisan support to advance.

Lummis has signed on to a number of pro-crypto initiatives in recent years, including a sweeping effort to create U.S. oversight and rules for digital assets, but none of them have yet taken action.

But this idea has very influential supporters so far.

Michael Saylor, the chief executive of software firm MicroStrategy (MSTR), the largest institutional bitcoin holder, argued that the U.S. should aim much higher. He said it needs to acquire 4 million BTC to shore up its treasury and build its financial strength. He said only one or two early movers will have a chance to do so.

“Bitcoin is not the solution to all our problems,” Saylor said. “It’s the solution to half our problems.”

ARK Invest CEO Cathie Wood also supported the reserve idea.

“If they do this right, so this is not going to be an instrument of monetary policy at all, it’s just going to be reflected in our balance sheet… this could be transformative,” he said.

Robert F. Kennedy, another independent candidate for president, also strongly supported the idea of ​​a replacement candidate at the same event on Friday.

Hashdex Head of Research Pedro Lapenta said that even if this does not happen, the idea of ​​it could be enough to benefit the Bitcoin ecosystem.

“While it remains unclear whether or when the United States will hold bitcoin as a strategic reserve asset, the idea is now permanently in the realm of public policy ideas for governments around the world,” Lapenta said in an emailed statement. “This is a tremendous development and will force many governments and major institutions to carefully consider the benefits of holding BTC.”