Title: Reserve Your Ass

Author: Foxi_xyz, Crypto Researcher

Translated by: ChatGPT

Editor's Note: Trump announced that the US strategic reserve may add cryptocurrencies like SOL, XRP and ADA, sparking discussions on the meaning of "American soil", the possibility of establishing a cryptocurrency reserve, and its legal and political challenges. While using executive orders or confiscated cryptocurrencies could bypass Congressional appropriations, a comprehensive reserve still requires Congressional authorization and faces legal and ethical issues. The market believes holding BTC reserves is possible, but the author believes only BTC reserves should be held, as the inclusion of other cryptocurrencies will undermine the seriousness of the reserve. In the author's view, Trump's move is more for advertising effect than substantive policy change.

The following is the original content (edited for readability):

Trump announced that the US strategic reserve may add SOL, XRP and ADA.

Aside from SOL, I think most speculators (including myself) are in a wait-and-see mode. This may be the most important event since the BTC ETF, with many implications:

• What exactly does "American soil" mean?

• How likely is it that the US will establish a strategic cryptocurrency reserve?

• What ways can the Treasury Department influence the formation of a cryptocurrency reserve?

I'm not a political science expert, but I've seen a lot of interesting discussions. I will summarize these discussions and add my personal views. Since Trump has already intervened, we must acknowledge that the rules have changed, and how should we move forward?

(Yes, I know he also mentioned BTC and ETH, but that's obviously to make the ad look less ugly.)

What exactly does "American soil" mean?

Thanks to @SonicAssistant's research, most American-based crypto companies have "foundations" overseas and no legal way to issue in the US:

• ADA, SOL, ETH - Switzerland

• XRP - Estonia

• HBAR, MATIC, SUI, APTOS, OP, ARB - Cayman Islands

As Movement founder @rushimanche said, "Politics is the most important market entry strategy for crypto companies today." He predicts that over the next five years, only teams that have established strong relationships with federal agencies, institutional capital, and world leaders will survive. This vision reinforces that true American influence depends on how companies effectively engage in politics and institutional power - the US CABAL.

Mint Venture partner @xuxiaopengmint also shared his thoughts on this reserve announcement:

"Since Trump took office, SOL, XRP and ADA have frequently visited Mar-a-Lago (Florida) and provided a lot of support to Trump, such as donations to his inauguration fund. Behind the scenes, various indirect transfers of interests may be more widespread. In return, Trump is now providing a significant 'advertising slot' for these tokens through presidential power."

How likely is it that the US will establish a strategic cryptocurrency reserve?

TL;DR: Unlikely.

Executive Order Authority?

The president can issue executive orders to initiate or direct a cryptocurrency reserve, but the order itself is not a magic wand. It must operate within the existing legal framework or cite emergency justifications. Without clear legal authorization to hold private cryptocurrency assets, the order may be viewed as illegal or invalid, unless supported by Congress. Trump can order research or pilot projects, or direct the Treasury to explore using the Exchange Stabilization Fund (ESF) for cryptocurrency operations, but a permanent, large-scale reserve of BTC, XRP, SOL, ADA, etc. may require Congressional authorization first.

Bypassing Congress?

The US Constitution primarily vests control over federal spending and asset purchases in Congress (the "power of the purse"). So bypassing Congress to establish a cryptocurrency reserve is legally tricky. The president cannot appropriate funds to purchase assets - only Congress can authorize federal spending. Effectively, this means any direct purchase of cryptocurrencies as reserves would require Congressional appropriations (or reallocating existing funds in ways Congress allows).

However, the federal government occasionally confiscates cryptocurrencies from criminal cases (e.g., Silk Road bitcoins, Dark Web drug markets). These are usually auctioned off for cash, but Trump's team has the idea of directly incorporating these cryptocurrencies into the national reserve.

2024 data, not updated

Using confiscated cryptocurrencies in this way can bypass the need for Congressional appropriations, as these assets are already government property. This is essentially an asset transfer, not new spending. Importantly, this approach has been explicitly considered: "Trump's crypto team plans to consider using cryptocurrencies confiscated in law enforcement actions to create a reserve." (Reuters)

However, under existing forfeiture laws, the proceeds from seized assets are usually required to be used for specific funds (e.g., the DOJ's Asset Forfeiture Fund) or victims - repurposing them for a strategic reserve may require modifying these rules or citing national security reasons. So there is some legal work to be done before incorporating XRP or SOL into the reserve.

The market believes holding BTC in the reserve is possible (PS not purchasing)

Accepting Token Donations vs. Purchasing for the Reserve

One way to avoid using taxpayer funds and the need for Congressional appropriations is to accept cryptocurrency donations into the reserve. This idea suggests that cryptocurrency companies or wealthy holders may donate tokens (e.g., freely give the US government large amounts of XRP or ADA) to kickstart the strategic reserve. While this seems convenient, this approach has major legal and ethical issues.

Existing regulations (e.g., Treasury's rules on accepting gifts) generally require any gifts (e.g., XRP to Treasury) to be liquidated and used to reduce national debt. To successfully incorporate XRP and ADA into the reserve, we would need new legislation or reinterpretation, so that any donated assets are not sold, but held as reserves. This would create a locking effect and provide huge advertising benefits for American-based cryptocurrency projects.

Possible Forms of a Cryptocurrency Reserve

Based on the previous information, the most likely scenario:

• Retain the government's existing Bitcoin holdings instead of liquidating them

• Allow cryptocurrency companies to pay taxes using cryptocurrencies (e.g., Bitcoin)

• Accept token donations from cryptocurrency companies

Personally, I only hope the first scenario "retaining the government's existing Bitcoin holdings instead of liquidating them" happens. Advancing ADA and XRP, or even ETH, as reserve assets is absurd. Such actions would undermine the seriousness of a dedicated Bitcoin reserve and further reduce the likelihood of federal-level BTC reserve legislation.

From @worldlibertyfi's actions, we are slowly understanding that the whole game is just an advertisement. If you provide enough benefits to Trump's cryptocurrency team, they will advertise for you. This is a very profitable business, as Trump is the President of the United States and has more power than 99.9% of existing market institutions.

Conclusion

Legally, while the president can direct executive agencies through orders or working groups, existing regulations (particularly those governing the Federal Reserve and Treasury) will constrain unilateral creation of such a reserve. Additionally, Trump may lean towards non-cash financing - through locking up government-held cryptocurrencies, encouraging cryptocurrency tax payments, or accepting donations - which brings additional legal and ethical challenges, as current laws generally require any donated cryptocurrencies to be liquidated to reduce debt.

From a political perspective, the inclusion of alternative coins such as SOL, XRP, and ADA in the reserves appears to be a way of providing a public "advertising space" for favored projects. However, such actions may dilute the seriousness of any dedicated Bitcoin reserve and face significant obstacles in Congress, as the Republican's fragile majority makes comprehensive legislative changes unlikely. I believe we only need a BTC reserve, not ETH, XRP, ADA, or SOL, just BTC. Original link