Original title: Reserve Your Ass
Original author: Foxi_xyz, crypto researcher
Original translation: ChatGPT
Editors note: Trumps announcement that the US strategic reserve may add cryptocurrencies such as SOL, XRP, and ADA has sparked a discussion on what American means, the possibility of establishing a cryptocurrency reserve, and its legal and political challenges. Although it is possible to bypass congressional appropriations through executive orders or confiscation of cryptocurrencies, the full establishment of a reserve still requires congressional authorization and there are legal and ethical issues. The market believes that holding BTC reserves is possible, but the author believes that only BTC reserves should be retained, and the addition of other cryptocurrencies will weaken the seriousness of the reserve. In the authors opinion, Trumps move is more for advertising effect than substantive policy change.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
Trump announced that the US strategic reserve may add SOL, XRP and ADA.
Aside from SOL, I think most speculators (myself included) are on the sidelines. This is probably the most important event since the BTC ETF, and there are many implications behind it:
What does “American mainland” mean?
How likely is it that a US strategic cryptocurrency reserve will be established?
In what ways can the Treasury influence the formation of cryptocurrency reserves?
Im not a political science major, but Ive seen a lot of interesting discussions. Ill collate them and add my personal perspective. Now that Trump has stepped in, we have to acknowledge that the rules have changed. How do we move forward?
(Yes, I know he also mentioned BTC and ETH, but that was obviously to make the ad less ugly)
What does “American mainland” mean?
Thanks to @SonicAssistant’s research, most US-based cryptocurrency companies have “foundations” overseas and have no legal way to issue in the US:
ADA, SOL, ETH - Switzerland
XRP - Estonia
HBAR, MATIC, SUI, APTOS, OP, ARB - Cayman Islands
As @rushimanche, founder of Movement, said, “Politics is the most important market entry strategy for crypto companies today.” He predicted that in the next five years only those teams that have built strong relationships with federal agencies, institutional capital, and world leaders will survive. This vision reinforces that true stateside influence depends on how effectively companies engage with political and institutional power — CABAL USA.
Mint Venture partner @xuxiaopengmint also shared his thoughts on the reserve announcement:
“Since Trump’s inauguration, SOL, XRP, and ADA have frequently visited Mar-a-Lago (Florida) and provided a lot of support to Trump, such as donating to his inauguration fund. Behind the scenes, various indirect interest transfers may be more extensive. In return, Trump now provides these tokens with a prominent ‘advertising space’ with presidential power.”
How likely is it to create a strategic reserve of cryptocurrency?
TL;DR: Very unlikely.
Executive order authority?
The president can issue an executive order to start or direct a cryptocurrency reserve, but an order itself is not a magic wand. It must operate within existing law or make an emergency case. Without clear legal authority to hold private cryptocurrency assets, the order may be deemed illegal or invalid unless supported by Congress. Trump can order studies or pilot projects or direct the Treasury Department to explore the use of the Exchange Stabilization Fund (ESF) for cryptocurrency operations, but permanent, large-scale reserves of BTC, XRP, SOL, ADA, etc. may require Congressional authorization first.
Bypassing Congress?
The U.S. Constitution places control over federal spending and asset purchases primarily in the hands of Congress (the “power of the purse”). As a result, bypassing Congress to establish a cryptocurrency reserve is legally tricky. The president cannot appropriate funds to purchase assets — only Congress can authorize federal spending. In practice, this means that any direct purchase of cryptocurrency as a reserve would require an appropriation approved by Congress (or reallocation of existing funds in a way that Congress would allow)
However, the federal government occasionally seizes cryptocurrencies from criminal cases (e.g., Silk Road Bitcoin, darknet drug markets). Usually these are auctioned off for cash, but Trumps team has the idea of putting these cryptocurrencies directly into the national reserve.
2024 data, not updated
Using confiscated cryptocurrency in this way could circumvent the need for congressional appropriations since the assets are already government property. This is essentially an asset transfer rather than new spending. Importantly, this approach was explicitly considered: Trumps cryptocurrency team plans to consider using cryptocurrency seized in law enforcement actions to create reserves. (via Reuters)
However, under existing forfeiture laws, proceeds from seized property generally must go to a specific fund (such as the Department of Justice’s asset forfeiture fund) or to victims — redirecting it to a strategic reserve would likely require amending those rules or making a national security case. So there’s already some legal work to do before adding XRP or SOL to the reserve.
The market believes that holding BTC in reserves is possible (ps not buying)
Accepting Token Donations vs. Purchasing for Reserves
One way to avoid using taxpayer funds and requiring congressional appropriations is to accept cryptocurrency donations to go into the reserve. The idea suggests that cryptocurrency companies or wealthy holders might donate tokens (e.g. give the U.S. government a large amount of XRP or ADA for free) to start a strategic reserve. While this may seem convenient, there are significant legal and ethical issues with this approach.
Existing regulations (such as those governing gifts to the Treasury) generally require that any gift (such as XRP to the Treasury) must be liquidated and used to reduce the national debt. In order for XRP and ADA to be successfully included in the reserve, we would need new legislation or a reinterpretation that any donated assets would generally not be sold but held as a reserve. This would create a lock-in effect and provide a huge advertising effect for U.S.-based cryptocurrency projects.
Possible forms of cryptocurrency reserves
Based on previous information, the most likely scenario is:
Preserve existing government-held Bitcoin rather than liquidate it
Allowing crypto companies to pay taxes using cryptocurrencies such as Bitcoin
Accepting Token Donations from Cryptocurrency Companies
I personally only hope that the first scenario, preserving existing government-held Bitcoin rather than liquidating it, happens. It is ridiculous to promote ADA and XRP, or even ETH as reserve assets. Such a move would undermine the seriousness of dedicated Bitcoin reserves and further reduce the likelihood of federal-level BTC reserve laws being enacted.
From @worldlibertyfis actions, we slowly understand that the whole game is just an advertisement. If you offer enough benefits to Trumps cryptocurrency team, they will advertise for you. This is a very profitable business because Trump is the President of the United States and has more power than 99.9% of existing market institutions.
in conclusion
Legally, while the president can direct executive agencies through orders or task forces, existing regulations (particularly those governing the Federal Reserve and the Treasury Department) would restrict the unilateral creation of such reserves. In addition, Trump may favor non-cash financing—by locking up government-held cryptocurrencies, encouraging cryptocurrencies to pay taxes, or accepting donations—which poses additional legal and ethical challenges, as current law generally requires that any donated cryptocurrencies must be liquidated to reduce debt.
Politically, including alternative coins such as SOL, XRP, and ADA in the reserve would seem like an attempt to provide public “advertising space” for favored projects. However, such a move could dilute the seriousness of any dedicated Bitcoin reserve and face significant obstacles in Congress, where the fragile Republican majority makes sweeping legislative change unlikely.
I think we only need BTC reserves, not ETH, XRP, ADA or SOL, just BTC.
