President Trump’s push to create a cryptocurrency strategic reserve should come as no surprise. After shedding his initial crypto skepticism, he campaigned on starting a reserve and even introduced his own $TRUMP meme coin last month.

Besides, the U.S. already has strategic reserves for vital commodities like grain, gold bullion, petroleum, natural gas, home heating oil, military equipment and medical supplies. Plus, the nation also maintains reserves of not-quite-as-vital commodities like cheese, raisons and helium.

No matter what’s in them, strategic reserves serve as emergency response tools in case of disruptions in the supply chain. The government can also use them to influence prices. A reserve used to buy and sell cryptocurrencies could establish rules for trading, taxing and regulating tokens, bringing a newfound sense of stability to the scene. Profits from a crypto reserve could even help pay down the nation’s $36 trillion debt.

“A U.S. Crypto Reserve,” Trump wrote Sunday in a Truth Social post, “will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA. I will make sure the U.S. is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!

Trump proposes stockpiling five cryptocurrencies, including Bitcoin (BTC), the original crypto and still the largest with market capitalization of $1.8 trillion and market share of 58%, as calculated by CoinGecko. It would also contain Ethereum (ETH), the second-largest crypto, which the website says has market capitalization of $269 billion.

Adding the other three to the mix may be a negotiating tactic used in real estate deals, suggests a CoinDesk report. It’s difficult to make a real world use case for XRP from Ripple labs or for Cardano’s ADA—both focus on payments as well as investing. Solana’s SOL is a store of value and thus might be a better fit with a reserve.

Trump may have included the three to have something to surrender when making a deal to start the reserve, Coindesk maintains. “Ask for 1,000 to settle at 500,” it says by way of example. But it also reports traders complained Trump may simply have been misinformed about the nature of the cryptocurrencies from Ripple and Cardano.

Be that as it may, one might argue the U.S. already has a crypto reserve because it’s holding cryptocurrency seized in criminal investigations. It may have as many as 200,000 bitcoins, which would have a value of nearly $20 billion at a price of $94,000 each.

So, like it or not, the prospect of a reserve isn’t just theoretical. But opinion is divided on whether it makes sense to make a more serious commitment to acquiring and storing digital currency.

Those in favor say “aye”

Republican Sen. Cynthia Lummis of Wyoming demonstrated confidence in a reserve by introducing a bill last year to establish one authorized to buy a million bitcoins over five years.

Although she’s a supporter, Lummis laments that lack of congressional support remains a problem. “It was hard for me to hear that my colleagues, even on my side of the aisle, were not ready,” she said Friday at a Bitcoin Investor Day event in New York City.

Back in Washington, Treasury Secretary Scott Bessent favors a reserve and has strongly opposed a central bank digital currency (CBDC) that might eliminate the need for a reserve.

Moreover, strong advocates for a reserve have found a home at the Bitcoin Policy Institute, a group advocating for a reserve based on its favorite crypto. The institute offers four arguments for a reserve.

First, an SBR—the group’s name for a strategic Bitcoin Reserve—would encourage economic and monetary stability by diversifying the nation’s reserves and strengthening the credibility of its fiscal position, financial system and global influence, the institute says. Bitcoin’s fixed supply and decentralized nature complement assets like gold and Treasury securities, it maintains.

A second supporting argument is that embracing Bitcoin would give the U.S. an advantage in geopolitical competition. At the same time, the institute says, a reserve could reinforce U.S. influence on emerging global financial standards and promote alignment with our democratic values over adversaries’ digital authoritarianism.

Third, the institute takes exception to the warnings from environmentalists who blast Bitcoin for consuming too much electricity. Mining could be leveraged to drive investment in renewable energy and support grid stability, helping to achieve climate and energy security goals, it maintains.

L‍ast, Bitcoin’s decentralized nature aligns with individual freedom and financial inclusion, offering potential benefits for the underbanked, the institute says.

And the advocates there just might get their wish. On Monday, the probability of establishing a U.S. Bitcoin reserve surged to 63% on Polymarket, says a report on the Blockchain.News website.

But some people don’t seem too enthusiastic.

Opposition to a reserve

Adversaries complain that establishing and maintaining a reserve would siphon off taxpayer dollars for the benefit of a relatively small and wealthy contingent of Americans.

An apparently vehement proponent of that viewpoint, financier Joe Lonsdale, posted this on X: “It’s wrong to steal my money for grift on the left; it’s also wrong to tax me for crypto bro schemes.”

Eswar Prasad, an economist at Cornell University who’s been widely quoted in the media on his interpretation of the meaning of a reserve, had this to say to The New York Times: “This would certainly be great for current Bitcoin holders and equally certainly be a bad deal for taxpayers.”

Resentment has also been brewing over the $130 million the crypto industry contributed to help Trump and other Republicans in the 2024 elections. Some observers credit those donations with tipping the scales in favor of Republican crypto fan Bernie Moreno, who defeated veteran liberal Sen. Sherrod Brown in Ohio.

The crypto industry contributions helped elect 253 pro-crypto candidates to the House, compared to 115 anti-crypto candidates, as parsed by the Stand With Crypto tracker and cited in The New York Times. In the Senate, 16 pro-crypto candidates and 12 anti-crypto candidates were elected.

Another point of contention has arisen with allegations of an apparent conflict of interest for David Sacks, the Silicon Valley venture capitalist and conservative podcaster who’s become the first ever AI and crypto “czar.” It happens he’s had ties to Bitwise 10 Crypto Index Units Beneficial Interest, an exchange-traded fund with shares in all five tokens mentioned for the reserve.

But the Sacks “scandal” trumpeted in Newsweek may amount to little or nothing. The crypto czar says he divested himself of all cryptocurrency-related holdings before the new administration took office.

However, that’s still not the end of the challenges confronting backers of a reserve. Some crypto enthusiasts point to the irony of the federal government having so much power over a currency that’s supposed to be decentralized.

Others fret about the reserve becoming a vehicle for scams and insider trading. One anonymous trader made a $200 million bet on Bitcoin hours before Trump’s announcement and scored a $6.8 million profit, according to Time magazine.

Meanwhile, a leader of the Satoshi Action Fund, a group dedicated to “changing the narrative on Bitcoin,’ according to its website, posted on X that it has helped more than 20 states introduce legislation to establish reserves.

And back at the White House, the administration’s crypto working group is scheduled to conduct the first cryptocurrency summit tomorrow. Trump seems determined to make good on the Truth Social promise he made on Sunday: “I will make sure the U.S. is the Crypto Capital of the world.”

Ed McKinley is Luckbox editor-in-chief.