President Trump signed an executive order Thursday officially establishing a strategic bitcoin reserve and a stockpile for other cryptocurrencies, following through on a campaign promise to an industry that helped him get elected.
The president sent crypto markets into a frenzy on Sunday, when he announced that four other cryptocurrencies would join bitcoin in a reserve similar to the nation’s gold stockpile. But many cryptocurrency investors didn’t know what to make of the reserve because the administration hadn’t said if it would be making new purchases or simply holding on to assets seized from criminals.
Proponents of a government crypto reserve say it will legitimize the sector, attract more industry activity to the U.S. and diversify the government’s financial assets.
The order signed Thursday clarified that new purchases can only be made for bitcoin, the oldest and most valuable cryptocurrency. And even those purchases would have to be budget neutral so they don’t cost taxpayers money, the order said, without going into detail on how they would be done.
Other cryptocurrencies will be held in a stockpile consisting of digital assets seized by law enforcement. They are likely to include ether, XRP, solana and cardano, the cryptocurrencies Trump mentioned in his social-media post Sunday, depending on how much of each the government holds.
Thursday’s order makes the U.S. one of the few nations to have a crypto reserve, in part because of how difficult stockpiles can be to manage and secure, and in part because of skepticism of the value of cryptocurrencies among many government officials worldwide.