The reserve will be capitalised with bitcoin owned by the Department of Treasury that was forfeited as part of criminal or civil asset forfeiture proceedings. Other agencies will evaluate their legal authority to transfer any bitcoin owned by those agencies to the Strategic Bitcoin Reserve, the order said.

It did not have a positive impact on the price of Bitcoin, however, as the virtual coin was trading over 4% lower at the time of publishing.

The executive order also established a US Digital Asset Stockpile, consisting of digital assets other than bitcoin owned by the Department of Treasury that was forfeited in criminal or civil asset forfeiture proceedings.

How the bitcoin reserve will work

A fact sheet prepared by the US White House said that currently, no clear policy exists for managing these assets, “leading to a lack of accountability and inadequate exploration of options to centralise, secure, or maximise their value”.

“It is estimated that the U.S. government owns about 200,000 bitcoin; however, there has never been a complete audit. The E.O. directs a full accounting of the federal government’s digital asset holdings,” David Sacks, the White House czar for AI and cryptocurrency, wrote in a post on X.

The United States will not sell bitcoin deposited into this Strategic Bitcoin Reserve, which will be maintained as a store of reserve assets. The Secretaries of Treasury and Commerce have been authorised to develop budget-neutral strategies for acquiring additional bitcoin, provided that those strategies impose no incremental costs on American taxpayers.

“With a fixed supply of 21 million coins, there is a strategic advantage to being among the first nations to create a Strategic Bitcoin Reserve. The United States currently holds a significant amount of bitcoin but has not maximized its strategic position as a unique store of value in the global financial system. Premature sales of bitcoin have already cost U.S. taxpayers over $17 billion,” the fact sheet said.

What the other digital assets will be

Last week, Trump had mentioned four other coins apart from Bitcoin which would be part of this stockpile – Ethereum, XRP, Solana and Cardano.

The White House said that the US government will not acquire additional assets for the US Digital Asset Stockpile beyond those obtained through forfeiture proceedings, similar to the Bitcoin reserve.

“The Secretary of the Treasury may determine strategies for responsible stewardship, including potential sales from the U.S. Digital Asset Stockpile. Agencies must provide a full accounting of their digital asset holdings to the Secretary of the Treasury and the President’s Working Group on Digital Asset Markets,” the White House said.

Crypto on the move

Since the victory of Trump in the United States Presidential elections, the crypto market has picked up, responding to signals that Trump could go easy on the virtual currency.

It was also anticipated that Trump having Elon Musk — who has long been an advocate for cryptocurrency — as a key adviser could further bolster investors’ belief in bitcoin and other digital virtual assets, even if concerns around conflict of interest remain.

Trump’s pick to lead the Securities and Exchange Commission (SEC), Paul Atkins, is widely considered a cryptocurrency advocate.

The agency has also recently dropped multiple investigations and lawsuits against cryptocurrency firms that alleged securities violations. Among them are investigations against Robinhood and Coinbase. Robinhood CEO Vlad Tenev had earlier said that he made a $2 million donation to Trump’s inaugural campaign fund.