Trump appointed what he called an artificial intelligence and cryptocurrency “czar” in the name of David Sacks, who is known for his role in PayPal’s rise as well as his history with Elon Musk. Both Sacks and Musk are working to streamline regulations in the name of innovation. In addition, Sacks will lead the Presidential Council of Advisors for Science and Technology (PCAST).
Under the Trump administration, the very first crypto summit will be held at the White House. His intent is to position the United States as a leader among nations in government digital asset strategy.
How Will the Bitcoin Reserve be Funded?
The newly signed executive order creates a Strategic Bitcoin Reserve that gives legitimacy to bitcoin by establishing it as aa reserve asset. The Strategic Bitcoin Reserve will be capitalized with bitcoin owned by the Department of Treasury that was forfeited as part of criminal or civil asset forfeiture proceedings. Other agencies will evaluate their legal authority to transfer any bitcoin owned by those agencies to the Strategic Bitcoin Reserve.
What is a Forfeited Criminal Asset?
According to the US Department of the Treasury, criminal forfeiture is described as an action brought as a part of the criminal prosecution of a person which requires that the government charge the property used from the crime as well as the convicted defendant so that it is forfeited to the government.
In addition to criminal forfeiture, there are forfeitures caused by racketeering, money laundering, and obscenity statues falling under the Controlled Substances Act (CSA) and Racketeer Influenced and Corrupt Organizations (RICO).
Civil judicial forfeiture involved actions brough against the property of a defendant with no criminal charges necessary.
And finally, administrative forfeiture allows for the forfeiture of property without judicial involvement and includes such items as import of prohibited merchandise, conveyances of controlled substances, and monetary instruments not in excess of $500,000 in value.
What Happens to Deposited Bitcoin?
Once Bitcoin is deposited into the Strategic Bitcoin Reserve, the US government will not sell that amount as it will become a part of the store of reserve assets. The Secretaries of Treasury and Commerce do have authorization to develop budget-neutral strategies to acquire more bitcoin as long as those strategies do not impose incremental costs on American taxpayers.
Beyond Bitcoin Sales Are Allowed
This Executive Order also established a US Digital Asset Stockpile, consisting of digital assets other than bitcoin owned by the Department of Treasury that was forfeited in criminal or civil asset forfeiture proceedings. The government will not acquire additional assets for the U.S. Digital Asset Stockpile beyond those obtained through forfeiture proceedings.
In the case of digital assets other than bitcoin, the Secretary of the Treasury may determine strategies for potential sales from the US Digital Asset Stockpile. Additionally, agencies must provide a full accounting of their digital asset holdings to the Secretary of the Treasury and the President’s Working Group on Digital Asset Markets.
How Likely Will Crypto Be the New Gold?
Right now there are no clear policies for managing crypto assets currently at a fixed supply of 21 million coins of which the US holds a significant amount. The Trump administration intends to make America at the head of the group in creating a reserve within the global financial system.
According to reports, the premature sale of bitcoin has cost US taxpayers over US$17 billion. Due to the scarcity of bitcoin, it is often referred to as digital gold, in addition to the fact that bitcoin has never been hacked.
What is the Actual Value of Bitcoin?
As of today’s values, one bitcoin is the equivalent of US $79,255.67. With 21 million coins in existence, that equates to US$1.67 billion. Compared to the US budget of US$6.9 trillion, that’s around .024% of the budget (no, not even one-fourth of 1%). So once again, it is being shown that the current US presidential administration is focusing on teeny tiny percentages with big splashy names when focus should be on what’s really important in global politics other than making Americans a laughing stock.
