President Trump's plan to create a strategic reserve for digital coins has come across a major obstacle. And it's called the US Congress that learned through money.
After Donald announced the creation of such a stockpile last weekend, crypto prices have skyrocketed to the notion that the US government will enter the market, buying and storing the world's largest digital coins, starting with Bitcoin, Ethereum, XRP, Cardano and Solana.
Then they crashed quickly for the difficult part. The president cannot use taxpayer money to buy things. He needs Congressional approval for the new spending plan. They're away from their highs.
Trump has yet to state the size of the crypto strategic reserve in his recent true social post or past executive orders on the issue, but its dimensions could be much smaller simply because of a $2 trillion deficit and $37 trillion debt.
That leaves the poor souls who make up Trump's working group on digital assets with the difficult task of figuring out how to make his boss happy (Donald doesn't want to be told “no”) without begging Congress to do something they don't fly.
One proposed plan: Using cryptography, the government has already been seized when it arrests money launderers and other criminals (don't forget that crypto is often the currency of choice for the bad guys).
The federal government had confiscated about 200,000 bitcoin, and President Biden had sold it to pay for his vast welfare state expansion. The current price is around $89,000, and Trump will play to play $18 billion worth of Bitcoin, just because he plowed it into all the strategic reserves.
Crypto expert Chris Giancarlo said that Chris Giancarlo, senior adviser to law firm Willkie, Farr & Gallagher and one appointed chairman of the Commodity Futures Trade Commission, is under discussion. The White House can simply add crypto to its investment. Again, the fund requires Congressional buy-in, but it is probably a much easier lift as it makes not just digital coins but many strategic investments.
Of course, strategic preparation is almost nothing new. They are commonly used by the Fed to store hard assets like oil. But it can only be done through Congressional acts, as in 1975 after the so-called Arab oil embargo on Israeli US support, when we began stocking up on oil, using taxpayer money, or debt.
Lawmakers have approved the use of public funds to create and maintain oil reserves for emergency purposes. It is the largest in the world in Texas and Louisiana, with the ability to hold 714 million barrels underground, primarily underground.
Of course, creating a cryptographic sanctuary avoids the obvious question. Trump, who drives the US into the crypto capital of the world, can revolutionize banks and commerce by advancing so-called blockchain technology that uses digital coins.
Until that happens, Crypto will remain one of the most volatile asset classes on the market. That's doubtful, some would say zero, Fiat's worth. Nakamoto at, the founder of Bitcoin, may not actually exist. And why is the government stocking up on things that compete with US dollar-based assets, like the debt we need to sell?
All the great questions that a White House spokesman didn't answer when I asked. Look for answers from Trump's crypto emperor David Sachs on Friday, when Trump hosted the “Crypto Summit” with top industry leaders in the White House.
