America Creates Strategic Cryptocurrency Reserve: Should Russia Follow This Example

Back in early March, Donald Trump signed an executive order to create a Bitcoin Strategic Reserve and a digital cryptoasset reserve in the United States. The Bitcoin Strategic Reserve is modeled after the United States Strategic Petroleum Reserve and the Gold Bullion Depository (the most famous depository facility is Fort Knox) ​​and will contain bitcoins confiscated by the U.S. Treasury for illegal activities. The digital cryptoasset reserve in the United States is created from cryptoassets that are not Bitcoin confiscated by the Treasury. The order requires U.S. agencies to transfer all cryptoassets they own to the appropriate reserves within 30 days. The main difference between a reserve and a reserve is that bitcoins are supposed to be replenished in a taxpayer-neutral way - by purchasing on the market, while the digital asset reserve is supposed to only be sold when needed.

And although no new documents or reports on its implementation have appeared in the public domain since the order was published, it is likely that movement in this direction is slowly but surely underway. After all, in order for this decree to become possible at all, Trump made a lot of effort, putting supporters and large investors of "crypto" in key positions in the financial block of the US government. Howard Lutnick, who officially owns hundreds of millions of dollars in cryptocurrency, was appointed Secretary of Commerce, Paul Atkins, a well-known lawyer defending crypto investors, became the head of the Securities and Exchange Commission, Brian Quintenz, another cryptocurrency advocate, was appointed head of the Commodity Futures Trading Commission. Even a special representative of the president, the "tsar" of AI and cryptocurrency, venture and crypto investor David Sachs, was appointed.

The Senate has also managed to secure support for crypto. The previously rejected Bitcoin Reserve Bill has been reintroduced with greater bipartisan support and is likely to pass. But what will a US Bitcoin reserve do? And should other countries do the same by creating their own cryptocurrency reserves? Let's try to figure it out.

Strategic state reserves are roughly divided into material reserves, which include, for example, food reserves, mobilization reserves, fuel reserves, and international reserves, which include monetary gold, other precious metals, highly liquid assets of state funds, obligations of foreign states and convertible currency (usually the US dollar, less often the euro). The first, material reserves, serve to provide the country in emergency situations, including pressure on the market during crises, when, for example, oil is sold from the reserve to maintain the price of gasoline. Thanks to the second, international reserves, countries ensure their independent economic policy, ensure state solvency at the international level.

What type of reserve does a cryptocurrency containing bitcoins belong to then? Obviously, not a material one, since bitcoin has no internal economic content. You can’t feed the needy with it, burn it in a stove for warmth, or throw it at an enemy in case of danger. But it’s also not a currency one, since bitcoin does not have such properties of money as liquidity — any large sales on a relatively small crypto market significantly lower its price. It is not a measure of value due to its high volatility, for the same reason it is not a means of accumulation, is not a means of circulation, and can only be used to buy very specific goods, mostly outside the scope of laws. In addition to volatility, which makes selling bitcoin on the market meaningless, bitcoin is subject to a significant number of risks, including cybersecurity risks, regulation, and technological imperfections.

So why does America need a completely special, previously unheard of, new type of reserve — a cryptocurrency one? Let's start with the fact that the United States is a completely special country, it issues the main world reserve currency — the dollar. Therefore, the US gold and foreign exchange reserves are far from the largest in the world, but somewhere in the middle of the second ten countries, about $250 billion. For comparison, Russia's gold and foreign exchange reserves are $680 billion. The US economic policy is not supported by the reserve, but by "trust in the world's largest economy" and the largest gold deposit on the planet, which is estimated at $760 billion. And the first argument for a bitcoin reserve is this: if the US can ensure trust in the dollar, then why can't they ensure trust in bitcoin?

Secondly, the US already has a huge amount of bitcoins that it has confiscated from various scammers and criminals. Today, the amount of bitcoins confiscated by the US is estimated at $25 billion, which is more than the cost of oil in the US national oil reserve, which is worth $23 billion. The peculiarities of bitcoin do not allow US government agencies to spend them in any way, with the possible exception of covert CIA operations. Withdrawing confiscated bitcoins into reserves allows a very significant amount to be formally withdrawn from the “shadows” onto the conditional balance of the state.

The next consideration, formulated in the proposed Bitcoin Act to the US Congress, consists of a fairly simple model for reducing the US national debt by accumulating bitcoin on the state balance. If we take the average annual growth rate of the US debt at 5%, then based on the current national debt of $36 trillion, the US debt will reach 116 trillion by 2049. If we take into account in retrospect that bitcoin has grown by 25% per year on average and will continue to grow at the same rate, then with an average bitcoin price of 100 thousand in 2025, the price of 1 million bitcoins in 2049 will be 21 trillion, or will cover 18% of the national debt. Indirectly, the Trump administration's acceptance of this model is evidenced by the statement made by Bo Hines, director of the White House Council of Advisors on Digital Currencies, at the recent Bitcoin 2025 conference in Las Vegas. He said, “We want to get as much as we possibly can get… First, we want to accumulate more, and second, we are not going to sell any bitcoin that we may have to the US government.”

And finally, another consideration underlying the American approach to the crypto reserve. The more bitcoins Washington buys, the less will remain with the enemies of the United States! In America, it has long been assumed that the circumvention of sanctions imposed on Russia, Iran and North Korea occurs, among other things, with the use of cryptocurrency. Therefore, full control over its use seems very important there. And since it is technically quite difficult to ensure control over the bitcoin network, you can simply buy up all available bitcoins, maintaining a constant increase in its price, which, in turn, increases the cost of crypto reserves.

In short, even completely rejecting lobbyist assumptions (Trump himself is a major crypto owner), the creation of a Bitcoin reserve for the United States obviously has its reasons. But does it make sense for other countries to follow the US example? There is no clear answer here. Each country exists in its own international context and has its own economic partnerships and strategic priorities. Not all countries, even quite wealthy ones, such as Qatar, for example, even have a gold reserve! Gold is difficult to store, its transportation is quite expensive relative to its price. Countries with strong currencies and independent economic policies, including the EU and Switzerland, rejected the creation of national Bitcoin reserves. Countries that are not rich but have large energy resources, such as Bhutan, saw in the US position an opportunity to make money by selling Bitcoin.

Should Russia create a cryptocurrency reserve? Proposals to this effect have already been made in the Duma. Thus, back in December, Deputy Anton Tkachev sent an appeal to the Minister of Finance of the Russian Federation Anton Siluanov with a proposal to create a strategic Bitcoin reserve in Russia, in which he noted that in the context of the country's limited access to international payment systems, cryptocurrencies are becoming the only instrument of international trade. In addition, the appeal noted that Bitcoin shows high profitability as an asset, so its purchase by the state is advisable. We will not argue with these statements. Let us simply list the arguments against crypto reserves once again. Crypto has low liquidity, high volatility, unclear regulation, technical imperfection, high cyber risks. There are more arguments against. This is why the Ministry of Finance is currently not considering crypto as an asset for the National Welfare Fund (NWF). The Central Bank of Russia adheres to the same position. "The issue of creating a national cryptocurrency reserve in Russia is not on the agenda," Stanislav Korop, acting director of the financial technology department of the Central Bank of the Russian Federation, recently stated, drawing attention to the fact that there are no significant amounts of confiscated crypto assets in the Russian Federation, and their purchase today has no financial appeal. Well, if both the Central Bank of the Russian Federation, traditionally skeptical of digital assets, and the Ministry of Finance, which has a positive attitude towards digital assets, clearly do not consider a cryptocurrency reserve a good idea, we can only agree with their opinion.