Trump Faces Blowback Over Plans for Crypto Reserve

DealBook|Trump Faces Blowback Over Plans for Crypto Reserve

The consequences of a crypto reserve

Cryptocurrencies are again riding high, after President Trump announced that he would create a national crypto reserve with five tokens, including three lesser-known and highly volatile ones.

It’s the latest boost that Trump has given the crypto industry, which spent some $130 million backing him and other Republicans. But the news drew criticism from many, including conservatives and even ardent crypto backers, over many concerns: giveaways to an already wealthy community, delegitimizing the digital currency industry and more.

“I will make sure the U.S. is the Crypto Capital of the World,” Trump declared on his Truth Social network on Sunday in announcing the reserve, which would involve the federal government stockpiling five tokens: two well-established ones (Bitcoin and ether) and three newer and more thinly traded ones (XRP, solana and cardano).

Proponents say a reserve would help taxpayers benefit from crypto’s price growth. It’s still not clear how such a reserve would work or when it would be introduced, though a Republican-authored bill in the Senate would direct the government to buy one million Bitcoins — worth about $92.6 billion at today’s prices — over five years.

The plan is music to the ears of many in the crypto industry, who have already benefited significantly from Trump moves like picking regulators who will go easier on digital currencies. The price of Bitcoin alone has jumped 36 percent since the election in November.

Critics of all political stripes decried the move. Some Republicans raised questions about spending taxpayer money on risky assets instead of paying down the national debt. Joe Lonsdale, a friend of Elon Musk’s, wrote on X: “It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes.”