In recent months, the U.S. government has made two major moves in the digital currency space that seem, at best, contradictory—and at worst, irresponsible.

In January 2025, President Trump signed an executive order titled “Strengthening American Leadership in Digital Financial Technology.” On the surface, this might sound like a push toward innovation. But dig deeper, and you’ll find the order prohibits any federal agency from developing or promoting a Central Bank Digital Currency (CBDC).

A CBDC is a digital version of the U.S. dollar, issued and backed by the Federal Reserve—essentially, a secure, stable, government-sponsored alternative to paper cash. Unlike cryptocurrency, a CBDC is designed to be boring. It isn’t meant to be an investment. It’s meant to be a currency—a store of purchasing power you can rely on, like the dollar in your wallet.

According to the Atlantic Council CBDC Tracker, thirty-three other countries have been researching or piloting CBDCs, including the UK, Canada, China, and members of the EU. These nations understand that digital currencies are coming, and they’re preparing for that reality in a way that preserves monetary sovereignty and protects consumers. By contrast, the U.S. has just walked away from the table.

But the story doesn’t end there. In March, the Trump administration announced the creation of a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. These new programs will hold cryptocurrencies—primarily Bitcoin—as reserve assets for the country. According to the executive order, these reserves will be funded using digital assets seized from criminal or civil asset forfeiture cases.

Historically, assets seized by the U.S. government through RICO or other legal channels—think yachts, cars, cash, and real estate—are liquidated, and the proceeds returned to public coffers. The U.S. Department of Justice’s Asset Forfeiture Policy Manual makes it clear that property is almost always sold. The idea of holding these assets long-term is virtually unheard of. Imagine the government choosing to keep and manage a seized strip mall or classic car collection as a national reserve.

So why are we making an exception for Bitcoin?

Cryptocurrency, for all its buzz, is not a currency in the traditional sense. Real currencies are stable. They don’t rise or fall 20% in a week. Bitcoin and its peers are speculative assets. They have value because enough people believe they do, not because they’re backed by a central authority or tied to any intrinsic utility. Investing in cryptocurrency is like casino gambling—there’s a thrill, and sometimes a payoff, but also a high risk of loss.

I’m not opposed to innovation. And I’m certainly not arguing that private citizens shouldn’t invest small amounts of “play” money in crypto if they’re comfortable with the risks. What I am saying is that treating Bitcoin like gold reserves—something the U.S. should hoard for the long term—ignores its core nature. It’s not a currency, it’s a speculation.

What’s more, the way this reserve is being funded is deeply problematic. Using seized crypto sidesteps public scrutiny even as it opens the door to future government purchases of digital assets. Today, we’re only holding confiscated coins. Tomorrow, will we start buying them with public funds?

The administration says it’s protecting financial stability and privacy by halting work on CBDCs. Yet it’s embracing an unregulated, wildly fluctuating asset class known for enabling illicit activity and lacking consumer protections. Pulling out of serious conversations about digital dollars while diving headfirst into the crypto casino makes no financial sense. It’s like choosing roulette over savings bonds.

Let’s hope wiser economic advisors prevail, and that the future of U.S. currency isn’t left up to the whims of Bitcoin.

Rick Kahler, CFP, is a fee-only financial planner and financial therapist with a nationwide practice, Kahler Financial Group, based in Rapid City. His co-authored books include Coupleship Inc. and The Financial Wisdom of Ebenezer Scrooge.

Photo: John Tsitrian