When asked about the Strategic Bitcoin Reserve at a press conference, Jerome Powell said that they are not allowed to own Bitcoin and that they are not in favor of changing the laws.
A strategic reserve is a stock of a critical resource that can be released in times of crisis or supply disruption. The best-known example is the U.S. Strategic Petroleum Reserve, the world’s largest emergency supply of crude oil, established by Congress in 1975 after the 1973–74 Arab oil embargo crippled the U.S. economy.
Presidents have used this stockpile to calm oil markets during wars or when hurricanes hit the U.S. oil infrastructure in the Gulf of Mexico.
Analysts and legal experts are divided on whether Trump could use his executive powers to create the reserve or whether an act of Congress would be required. Some have argued that Trump could create the reserve through an executive order directing the U.S. Treasury’s Exchange Stabilization Fund, which can be used to buy or sell foreign currencies and can also be used to hold Bitcoin.
The reserve could also include Bitcoin that the government has seized from criminal actors, which is around 200,000 tokens worth around $21 billion at current prices, according to the data.
Trump suggested this stockpile could be a starting point when announcing his BTC reserve plan in a speech in July, but it remains unclear what the legal process would be to move them out of the Justice Department.
Trump did not say whether the government would add to that stockpile by purchasing more BTC on the open market. To do so would require the government to borrow money, but some Bitcoin reserve advocates say the U.S. could sell some of its gold reserves and use the proceeds to buy BTC.
*This is not investment advice.