Former US President Donald Trump announced the formation of a cryptocurrency reserve including XRP, Cardano (ADA), Solana (SOL), Bitcoin (BTC), and Ethereum (ETH). This move aims to strengthen the industry following 'corrupt attacks' by the Biden administration, according to Trump.
Introduction of US Crypto Reserve
On the Truth Social platform, Trump stated that the new reserve will elevate the critical industry and turn the US into a major crypto hub. Initially, he mentioned only XRP, SOL, and ADA, which caused dissatisfaction among BTC and ETH communities. However, he later clarified that BTC and ETH would also be part of the reserve.
Rationale Behind Asset Selection
The choice of assets for the reserve is based on their unique benefits. Bitcoin is known as 'digital gold' and serves as a store of value. Ethereum's smart contracts have transformed decentralized finance. XRP's efficiency and speed are valuable for global transactions, while Cardano's scientific approach adds credibility. Solana enhances scalability with low fees and high transaction speed.
New Opportunities in DeFi
Government declarations to hold digital assets may increase confidence in their long-term viability and legitimize cryptocurrencies for retail investors. Moreover, introducing non-smart contract assets like Bitcoin and XRP into DeFi applications opens new opportunities. For instance, Flare Network's FAssets system will allow these assets to interact with smart contracts, unlocking new yield sources through decentralized platforms.
The creation of a US crypto reserve is a significant step toward integrating digital assets into the national economy. However, many questions about the reserve's mechanisms remain unanswered. Answers are expected at the upcoming cryptocurrency summit at the White House.
