On March 6, 2025, the US White House announced an executive order establishing a “Strategic Bitcoin Reserve and United States Digital Asset Stockpile” for the nation. The White House says the reserve and stockpile is meant to position the US “as a leader among nations in government digital asset strategy.”
But some aren’t convinced the strategy is sound. The World Bank, for example, stated in September 2024 that crypto assets “fall short of meeting the basic requirements for reserve assets.” Media reports following the signing of the executive order list numerous reasons why the reserve is a bad idea, including a lack of strategic value.
One key element of the reserve that remains undetermined is how it will be implemented. The executive order directs the US Secretary of the Treasury to establish an office to administer and maintain control of custodial accounts for both the reserve and the stockpile. It gives the Secretary of the Treasury 60 days to deliver an evaluation of key considerations surrounding the new initiative.
Experts point to needs for security, transparency
Patrick Gruhn, the founder and CEO of Perpetuals.com, is a cryptocurrency expert who co-founded DigitalAssets.ag, which later became FTX Europe, to make tokenized stocks available with an approved security prospectus. He also served as a partner at K&G Lawyers, a Swiss firm specializing in digital assets. Perpetuals.com is a startup that empowers perpetual futures trading without boundaries by providing an MiFID II market infrastructure for crypto derivatives trading.
Gruhn highlights the need for appropriate management of the reserve, with transparency being a key concern. “Reserves can be tokenized to make their management more transparent,” he says. “Making it possible to audit the reserve via blockchain would align with the ongoing attempts by the government to define cryptocurrencies as an asset that should be appropriately managed and in compliance with all the relevant regulations.”
Gruhn also suggests security would be paramount. “Keeping the reserve secure would entail strict custody practices,” he says, “including institutional-grade custodian services with features such as multi-signature security and regulatory compliance.”
Crypto’s decentralized nature poses security challenges unlike any other commodity the government holds in reserve. Cryptographic keys would need to be carefully managed, and smart contracts used to manage transactions would need to be constantly analyzed for vulnerabilities. If crypto is moved through exchanges, their security protocols would need to be carefully assessed.
How additional assets will be amassed remains unseen
According to the executive order, the US currently holds a “significant amount” of Bitcoin, but “has not implemented a policy to maximize” the strategic position Bitcoin could hold as a “unique store of value in the global financial system.” However, other than stating that the reserve and stockpile will initially be funded by Bitcoin and other digital assets forfeited to the US Treasury Department through civil or criminal forfeiture, it doesn’t say how the fund will grow. It simply directs the US Secretary of the Treasury and Secretary of Commerce to develop strategies for acquiring Bitcoin that don’t impose “incremental costs” on US taxpayers.
The order also does not say how much Bitcoin the US plans to hold in the fund. A recent bill introduced in the Senate, however, calls for the US to hold over 1 million Bitcoin as part of the reserve. Wyoming Senator Cynthia Lummis, one of the lawmakers who introduced the bill, has suggested that the US raise money to buy Bitcoin by selling off some of its gold reserves.
Gruhn suggests the US will need to take a number of steps before questions about how the reserve will be funded and managed arise. Whether or not the initiative becomes law, as Senator Lummis suggests it should, would also play a key role in the reserve’s future.
“If the US Treasury Department decides the best course of action will be to buy Bitcoin, the approach taken to achieve that goal will depend on the overall policy objectives it has set for itself, which could be determined by legislation mandating the selling of gold reserves,” Gruhn says. “Choosing to reallocate assets from other reserves is a possibility, but it would occur only under strict conditions set by Treasury or lawmakers. It is also possible that the Treasury’s Exchange Stabilization Fund, which has been previously employed to manage financial crises and stabilize currency markets, would be used for these purchases. However, that course would require careful consideration and alignment with policies, ultimately keeping the decision consistent with the legal requirements and processes designed to support the stability of the global financial systems.”
Establishing a crypto reserve would be a milestone in furthering the development of the crypto landscape in the US. The recent order sets the stage for that reserve, and the crypto industry will closely monitor the Treasury Department’s efforts to make it a reality.