Umair
Written by James Tylee at Cyber.FM
Eight years ago, the idea of a US Strategic Crypto Reserve might have seemed unnecessary, even reckless. But the landscape has changed. Institutional investors are here, and other nations are moving forward. Whether we like it or not, we now must consider this move seriously -“it is what it is.” If the US fails to act, we risk falling behind in the next evolution of global finance. Recent developments indicate a growing global trend toward adopting cryptocurrencies at the national level, aligning with my perspective that the US should establish a strategic crypto reserve to remain competitive. US Strategic Bitcoin Reserve, already holds approximately 200,000 BTC which it has accumulated as part of criminal or civil proceedings and thus taken from various nefarious actors.
There is growing interest for the adoption of cryptocurrencies. El Salvador has continued to bolster its Bitcoin holdings, recently purchasing additional coins to strengthen its strategic reserves. The Czech national bank governor is considering holding Bitcoin as part of its strategic national reserve and, meanwhile, the Mubadala sovereign wealth fund in the UAE has announced it has acquired $437million of Bitcoin. In March 2025, President Donald Trump announced plans for a US strategic crypto reserve, including cryptocurrencies like Bitcoin, Ethereum, XRP, Solana and Cardano. This initiative aims to position the US as a leader in the digital asset sector. Pro-crypto Senator, Cynthia Lummis, has expressed support for the strategic crypto reserve but acknowledges challenges in gaining sufficient congressional backing. This underscores the need for legislative efforts to ensure the initiative’s stability and longevity. These developments suggest that the US must adapt to the evolving financial landscape by considering the establishment of a strategic crypto reserve to maintain its economic leadership.
Rebutting the 8 arguments against a Strategic Crypto Reserve
1. Policy reversibility
Critics argue that a reserve created through executive action could be overturned by future administrations. However, the same is true for many economic policies. The solution? Codify it into law with bipartisan support, ensuring long-term stability.
2. Impact on the US dollar
Holding Bitcoin doesn’t mean abandoning the dollar — just as gold reserves don’t undermine fiat currency. Instead, it can serve as a hedge against inflation and economic downturns, reinforcing financial resilience rather than signalling weakness.
3. Existing Bitcoin exposure
Whilst American investors and funds already hold Bitcoin, direct government ownership offers strategic control, much like holding gold reserves. Tax revenue from private investors is beneficial, but it does not provide the same level of national economic leverage.
4. Lack of strategic necessity
Bitcoin and other cryptos may not yet be considered essential, but neither was gold during peacetime — until it was. In a future where digital assets play a central role in global trade and finance, the US must be prepared rather than reactive.
5. Value dilution of Bitcoin
Some worry that including multiple cryptocurrencies in a reserve diminishes Bitcoin’s unique value. However, diversification is a key principle of financial security. Just as nations hold different assets, a well-balanced crypto reserve could mitigate risks and maximize opportunities.
6. Bitcoin’s independence from government
Bitcoin has thrived without government backing, but that doesn’t mean government involvement would harm it. Gold, too, is an independent store of value, yet nations hold reserves for strategic reasons. Crypto can coexist with private markets while still serving national interests.
7. Public perception issues
Critics claim taxpayer money shouldn’t fund a reserve that benefits only a subset of Americans. But perceptions change. Just as public scepticism toward Bitcoin has waned over time, so too will resistance to a strategic reserve if its benefits become evident.
8. Conflict of interest concerns
There are fears that a crypto reserve could be a vehicle for corruption. However, transparency and ethical
guidelines can mitigate these concerns. Just as the government manages gold reserves without favouritism, crypto reserves can be handled with accountability.
Beyond a strategic reserve, the government can play a pivotal role in making cryptocurrencies more accessible to retail investors and the public. Historically, financial markets have benefited from government-backed infrastructure, such as FDIC insurance for banks and regulatory frameworks for stock exchanges. A similar approach could be taken with crypto to increase public confidence and adoption. I believe many agree that we lack regulatory clarity and consumer protection. Retail investors can be hesitant to enter the crypto space due to regulatory uncertainty and concerns about fraud. By establishing clear, fair regulations, the government can foster an environment where individuals feel safe investing in digital assets. We could do this with “Government-Backed Custody Solutions”. Secure custody of digital assets is a major barrier for retail investors. A government-regulated or supported crypto custody system, like SIPC insurance for brokerage accounts, could protect consumers from theft or exchange failures.
The government could encourage crypto adoption by offering tax incentives for long-term holdings or integrating digital assets into existing retirement accounts like 401(k)s and IRAs. This would normalise crypto as part of personal finance planning. However, recent regulatory confusion has made tax compliance more difficult for crypto holders. I personally hold an IRA with iTrustCapital which not only offers Insured Crypto IRA’s for Tax Deferred Savings, but even recently announced full Custodial Accounts. This kind of account will only allow USD deposits and withdrawals to and from the account owner’s US bank — it does not allow an account to be funded or withdrawn as digital assets. This feature reduces the risk of your account getting hacked and having your digital assets sent to an external wallet.
I’ve also personally advocated for this earlier on Twitter and it exactly aligns with a government-backed custody solution.
Let’s remember the “elephant in the room”: The IRS nearly implemented Revenue Procedure 2024–28, requiring all taxpayers to track their crypto cost basis on a wallet-by-wallet (or exchange-by-exchange) basis without prior notice. This sudden shift, lacking proper safe harbour provisions, led to significant backlash, with courts ultimately postponing its enforcement by a year for the protection of taxpayers. The mishandling of this process demonstrates the need for clearer, more predictable regulatory policies that encourage participation rather than create confusion and deter investment. If anything, the government could facilitate the integration of crypto payments into public services — such as taxes, fees or public utility payments — it would drive mainstream adoption while demonstrating the practical use of digital assets. More businesses would accept these currencies and liquidity provided by everyone involved would create a stronger economy.
At the end of the day, the US didn’t ask for this reality, but we helped create it by allowing institutions to flood into crypto. If we don’t act, other nations will. The debate is no longer “should we?” but “how do we do it right?” A well-structured strategic crypto reserve, with clear governance and safeguards, could position the US as a leader in digital finance rather than a reluctant participant. The time for debate is over; the time for action is now.
