President Trump has unveiled a new proposal for a strategic crypto reserve, shifting his focus from a Bitcoin-only reserve to a more diversified approach. His plan involves a reserve comprising Bitcoin — often dubbed “digital gold” for its inflation-hedging properties — alongside Ether, XRP, Solana, and Cardano.
Crypto leaders have criticized Trump’s idea, arguing that if a reserve is established, it should be exclusively Bitcoin-based. Key details remain unclear, including the reserve’s size, timeline, and whether the Federal Reserve or another entity would manage it.
What would it look like if Trump were to move forward with this crypto reserve? Mazyar Torkpour, co-founder of Paymento, a non-custodial crypto payment gateway, shared his insights with Quartz by email.
What factors influenced Trump’s choice of cryptocurrencies over others?
Trump’s plan envisions a reserve that includes Ether, XRP, Solana, and Cardano alongside Bitcoin. Torkpour explained that the proposed reserve aims to diversify the nation’s holdings with a carefully selected range of cryptocurrencies. The choices appear to favor market-leading, technologically advanced, and widely adopted digital assets, each known for its distinct use case.
Bitcoin, an obvious inclusion, is considered “digital gold” and serves as a store of value. Ether, renowned for its smart contract capabilities, powers decentralized applications, while its competitor, Solana, offers high transaction speeds and scalability, making it a key player in decentralized finance (DeFi) and NFT platforms, Torkpour noted. XRP is designed for fast cross-border payments, while Cardano prioritizes security and sustainability, he added.
When asked why Trump’s selection excluded other major cryptocurrencies like Litecoin or Polkadot, Torkpour suggested the decision might be based on market positioning, technological advantages, or strategic considerations aligned with the administration’s goals.
What would be the proportion of cryptocurrencies?
Although specific allocations have not been disclosed, the integration of cryptocurrencies into national reserves would likely be a gradual process. Torkpour emphasized that this approach allows for diversification while mitigating the risks associated with the crypto market’s volatility.
“The fraction would depend on ongoing assessments of market stability, liquidity, and the strategic value of these digital assets,” he added.
Would the cryptocurrencies be stored in hot or cold wallets?
Torkpour explained that if Trump created a strategic crypto reserve, it would require the U.S. Treasury to purchase and securely store these assets, likely using a combination of cold and hot wallets to balance security and accessibility.
He also suggested that a crypto reserve could act as a hedge against traditional market fluctuations while positioning the U.S. as a leader in the emerging digital economy.