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The crypto world braced for another shock as US President Donald Trump revealed plans to create a cryptocurrency reserve. Several major cryptocurrencies skyrocketed in value when the strategy was revealed on March 2. Bitcoin – before even being named as part of the planned reserve – soared from around $85,000 to $94,000 within 24 hours.
Launching a federal crypto reserve suggests the US government plans to buy and hold cryptocurrency using US dollars, solidifying Trump’s support of blockchain and decentralized finance. The government is currently eyeing five cryptocurrencies for the reserve – bitcoin, Ethereum, XRP, SOL, and ADA. It’s also worth noting that the SOL token from Solana is based on the same blockchain that Trump used to mint two meme coins in January 2025.
The inclusion of the XRP token, developed by Ripple Labs, is also controversial. Ripple Labs is currently in the midst of a legal battle with the US Securities and Exchange Commission (SEC) due to allegedly selling its token in an unregistered security offering. The Trump administration’s attention to the XRP token suggests a major shift in regulatory focus – itself a campaign promise heading up to last year’s elections.
What are the regulatory and financial implications?
The whole idea behind cryptocurrency is rooted in decentralized finance and distributed trust, which naturally aligns with libertarianism and decentralized government – both of which have long been favored by many conservative Americans even long before Trump was elected. The proposed crypto reserve spans a mix of digital assets serving several different functions:
- Bitcoin for storing value in the form of digital currency
- XRP for facilitating payments between enterprises
- Ethereum, SOL, and ADA for decentralized applications
Clearly, the strategy goes beyond retail trading to make digital assets an integral part of the financial ecosystem. On the other hand, detractors say that it lacks regulatory oversight and economic stability, two characteristics that are inherently hard to mitigate in distributed finance. After all, for everyone who has made a fortune in crypto, there are countless others who have lost. Undeniably, the system is also highly vulnerable to abuse, hence why crypto is now the go-to medium for fraudsters and other malicious transactions.
For fintechs, the legitimization of crypto and increased regulatory clarity will no doubt be welcome. On the other hand, the whole concept of a state-controlled reserve could actually undermine the entire ethos of crypto, potentially sidelining smaller players. Fintechs must therefore play it carefully, prioritizing a sustainable balance between innovation and future regulatory shifts.
