Forbes reported that Donald Trump would likely launch a strategic bitcoin reserve after Pennsylvania unveiled its Bitcoin Strategic Reserve Act.
Polymarket, the world’s largest prediction platform showed the odds of Trump creating this reserve jumped from 22% to 38% after the bill’s introduction.
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Also, the Satoshi Action Fund helped the state write the Bitcoin Rights Bill to improve regulatory clarity for digital assets.
Soon, this asset reserve might encourage other countries to build a similar fund.
As a result, cryptocurrency prices may rise to new heights and change the global financial system.
How would a strategic bitcoin reserve work?
A strategic bitcoin reserve would be like a conventional gold reserve. Britannica defines the latter as a “fund of gold bullion or coin held by a government or bank.”
Countries use gold reserves to support banks and stabilize currency value, especially during economic upheaval.
The strategic bitcoin reserve will serve a similar purpose.
Nowadays, various US legislations like the Pennsylvania Bitcoin Strategic Reserve Act raise hopes that Trump will make one for the country.
Senator Cynthia Lummis proposed a bill that explains further how a national bitcoin fund might work.
She calls it the “Boost Innovation, Technology, Competitiveness through Optimized Investment Nationwide” or the BITCOIN Act.
It will build the reserve by purchasing bitcoin and keeping the BTC that authorities seized. The BITCOIN Act calls for annual purchases of up to 200,000 BTC for five years for a total of 1,000,000 BTC.
US authorities have seized 69,370 BTC at the time of writing.
Consequently, Forbes says the strategic bitcoin reserve will keep roughly $6.4 billion worth of BTC from circulation.
The reserve could legitimize cryptocurrency as a financial asset. Also, the reduced supply would likely raise prices to record levels.
Three months ago, Donald Trump promised at a bitcoin conference in Nashville that he would make the US the “crypto capital of the planet.”
Now that he won the recent election, the world looks to President Trump whether or not he will fulfill these promises.
If he does, more countries might follow that example.
Specifically, the Philippines might do so as it has been adopting AI, blockchain and other innovations to improve its economy.