Theo Bo Hines, the executive director of the Presidential Advisory Council on Digital Assets, the Trump administration may consider using tariff revenue to build a national Bitcoin reserve.
This is a notable change, as recent information suggested that revenue from gold sales would help fund the Bitcoin reserve.
Trump's Tariff Revenue Will Fund the US Bitcoin Reserve
Bo Hines explained this possibility in recent interviews. He emphasized the necessity for the US to act quickly in the context of global competition for Bitcoin accumulation.
In a conversation with Thinking Crypto on Tuesday, Hines stressed that the US must compete globally for Bitcoin. He highlighted creating a Strategic Bitcoin Reserve (SBR) through means that do not impact the budget. He said this includes new funding mechanisms such as tariff revenue.
"The SBR recognizes what Bitcoin's value is and how it can be leveraged for the American people. Bitcoin is limited in quantity, and I think there will be a race to accumulate," Hines stated.
He reiterated this in an interview with Anthony Pompliano, founder and CEO of Professional Capital Management. Bo Hines discussed reassessing tariffs, Bitcoin, and gold in the discussion. He called them key components of the administration's macroeconomic strategy.
"The strategic reserve is just the beginning. We are thinking long-term about assets that can help the American people and protect us from global shocks," Hines said to Pompliano.
This plan differs from what Wyoming Republican Senator Cynthia Lummis proposed. BeInCrypto reported that she introduced legislation to increase the government's Bitcoin holdings by selling part of the Federal Reserve's gold.
"We will convert our excess reserves at our 12 Federal Reserve banks into bitcoin within five years. We have the money right now," said Senator Lummis in July at the Bitcoin 2024 Conference.
The idea of using tariff revenue to buy Bitcoin is novel. However, this move could redefine the role of digital assets in the US economic strategy. It reflects a broader ideological shift, viewing digital assets not just as speculative tools but as national economic instruments.
Cryptocurrency advocates have reacted enthusiastically. Influencer Crypto Rover called the tariff-based Bitcoin purchase plan "very optimistic," reflecting broader market sentiment.
However, some experts warn that this policy could backfire. Charles Hoskinson, founder of Cardano, questioned the effectiveness of tariffs, warning that future government-imposed tariffs on cryptocurrencies will be ineffective.
Meanwhile, others warn that Trump's strong tariff stance could weaken US Bitcoin mining dominance. Hardware costs and international trade barriers could harm domestic miners, especially if mining equipment manufactured in China faces additional tariffs or restrictions.
Despite these complexities, the administration seems undeterred. Hines also suggested integrating stablecoin legislation and blockchain technology into banking infrastructure. He said this would strengthen law enforcement capabilities in the cryptocurrency sector and signal a multi-directional strategy.
Hines' comments appear against a backdrop of broader financial changes. Reports suggest the Trump administration is considering replacing Federal Reserve Chair Jerome Powell.
As inflationary pressures increase and trade tensions with China escalate, there is speculation that a more cryptocurrency-friendly Fed chair could adjust monetary policy in line with the administration's digital asset goals.
With increasing geopolitical tensions and central banks racing to define their digital monetary strategies, the US appears to be moving towards a more assertive position.
Bitcoin (BTC) Price Performance. Source: BeInCryptoData from BeInCrypto shows Bitcoin is trading at $85,465 at the time of writing. This represents a slight increase of 1.09% over the past 24 hours.
