The US government already holds over 208,000 bitcoin, but retaining it is more complicated than might be assumed. The question on everyone’s mind is: can a strategic bitcoin reserve move forward without congressional approval? Experts disagree on the matter.
The US government’s current stockpile of bitcoin was acquired through confiscations related to criminal activities. Historically, the government has sold this seized bitcoin in auctions, but former President and now President-elect Donald Trump announced in July that under his administration, the government would keep 100% of all the bitcoin it currently holds or acquires in the future.
However, experts tell CoinDesk that the incoming president might need help from Congress to establish a proper strategic reserve. Perianne Boring, founder and CEO of crypto advocacy group The Digital Chamber, stated that while Trump can make promises, there isn’t any established method to implement it, and the procedure would likely involve the coordination of various government agencies.
Moish Peltz, a partner at Falcon, Rappaport and Berkman, added that the rules surrounding seized bitcoin might change on a department-by-department basis and vary depending on how the bitcoin was seized in the first place. “Some portion of the seized bitcoin might need an act of Congress, but not necessarily,” he said.
Senator Cynthia Lummis has argued for a more proactive approach, proposing a bill for the US to sell off a portion of its gold reserves and buy 1 million bitcoin. However, Nic Carter, a partner at Castle Island Ventures, wasn’t so sure, stating that congressional priorities when it comes to crypto involve passing a stablecoin bill and investigating Operation Choke Point 2.0.
So, can there be a legal loophole that allows the government to purchase bitcoin without congressional approval? Maybe. Zack Shapiro, head of policy at the Bitcoin Policy Institute, argued last week in favor of a novel and untested theory: that the Treasury has the authority to acquire bitcoin through the Exchange Stabilization Fund (ESF) by purchasing bitcoin-denominated debt instruments.
As the incoming president, Trump’s ability to establish a strategic bitcoin reserve without congressional approval remains uncertain. While some experts believe it’s possible, others argue that it would require an act of Congress. As the situation unfolds, one thing is clear: the US government’s stance on bitcoin is about to get a lot more interesting.
Prediction: Given the uncertainty surrounding the US government’s ability to establish a strategic bitcoin reserve without congressional approval, we predict that the price of bitcoin will remain volatile in the short term. However, if the government does manage to establish a reserve, it could lead to increased adoption and a potential price surge in the long term.
