Jerome Powell recently stated they oppose changing laws to accommodate a Bitcoin reserve. The idea raises intriguing debates.
Strategic Reserve: Concept and Examples
A strategic reserve is a backup of critical resources for crisis situations. A well-known example is the US Petroleum Reserve, established after the 1973–74 oil embargo. It has been used to stabilize markets during crises and natural disasters.
Experts' Opinions and Trump's Possible Actions
There is division among analysts regarding Trump's authority to establish a Bitcoin reserve through executive action. Some believe an executive order to use the Exchange Stabilization Fund, capable of holding Bitcoin, could be a path forward.
Potential Sources for Bitcoin Reserve
The reserve might include about $21 billion in Bitcoin seized from criminals. Trump hinted this could be leveraged in his proposal, yet legal pathways remain unclear. Selling part of the gold reserve to finance Bitcoin purchases has also been suggested, needing borrowed funds.
Despite differing opinions and suggested approaches, establishing a strategic US Bitcoin reserve remains a complex legal challenge needing legislative approvals.