By Gertrude Chavez-Dreyfuss and Lisa Pauline Mattackal
WASHINGTON (Reuters) – hit a record high above $107,000 on Monday after President-elect Donald Trump reiterated plans to create a U.S. bitcoin strategic reserve, stoking the enthusiasm of crypto bulls. Here’s how the plan could work.
WHAT IS A STRATEGIC RESERVE?
A strategic reserve is a stock of a critical resource which can be released at times of crisis or supply disruptions. The best-known example is the U.S. Strategic Petroleum Reserve, the world’s largest supply of emergency , which was created by an act of Congress in 1975 after a 1973-74 Arab oil embargo throttled the U.S. economy. Presidents have tapped the stockpile to calm oil markets during war or when hurricanes hit oil infrastructure along the U.S. Gulf of Mexico.
Canada has the world’s only strategic reserve of maple syrup, while China has strategic reserves of metals, grains and even pork products.
HOW WOULD A U.S. STRATEGIC BITCOIN RESERVE WORK?
Analysts and legal experts are divided on whether Trump could use his executive powers to create the reserve, or whether an act of Congress would be necessary. Some have argued Trump could create the reserve via an executive order directing the U.S. Treasury’s Exchange Stabilization Fund, which can be used to purchase or sell foreign currencies, and to also hold bitcoin.
The reserve could include bitcoin that the government has seized from criminal actors. That stands at around 200,000 tokens, worth about $21 billion at the current price, according to bitcointreasuries.net. Trump suggested in a July speech unveiling his bitcoin reserve plan that this stockpile could be the sta