Bitrabo Editorial
A recent discussion sparked by Donald Trump’s remarks on Bitcoin’s potential as a strategic reserve asset for the United States has garnered attention from various experts and analysts. David Bailey, CEO of Bitcoin Magazine and an advisor to Trump, is leading the advocacy for a comprehensive Bitcoin framework under Trump’s potential administration.
Bailey has explored how the US could adopt Bitcoin as a strategic reserve asset, proposing to timelock the 210,000 BTC currently held by the USA for 100 years, as per a report by Bitrabo.
The Potential Implementation of Bitcoin as a Reserve Asset
Matthew Pines, Director at Sentinel One and a National Security Fellow at the Bitcoin Policy Institute, shared insights on possible legal frameworks through which Trump could make this move. Pines outlined two key mechanisms for implementation.
#1 Leveraging the Exchange Stabilization Fund (ESF): The ESF permits the Treasury Secretary to engage in dealing with various instruments like gold and foreign exchange. Pines suggests drafting an executive order to designate Bitcoin as a form of foreign exchange, enabling direct Bitcoin purchases to stabilize the dollar’s exchange value.
#2 Directing the Federal Reserve to Utilize Emergency Powers: The Federal Reserve Act allows the Fed to address unusual circumstances by creating lending facilities. Pines proposes instructing the Fed to set up a Special Purpose Vehicle (SPV) for purchasing Bitcoin on the open market.
Steven Kelly from the Yale Program on Financial Stability questioned the feasibility of using the Fed under Section 13(3) and emphasized the challenges involved. Meanwhile, David Beckworth from Mercatus Center raised the idea of government pension funds investing in Bitcoin, to which Pines highlighted regulatory hurdles.
Currently, the price of BTC stands at $65,032.