Introduction to US Crypto Reserve
President Trump has confirmed plans for a US crypto reserve to make the US the crypto capital of the world. The reserve will function similarly to the US asset reserve, which is the worth of assets held by the Federal Reserve, America’s central bank. The US asset reserve includes gold, foreign currency echange, and other assets, serving as a security net to stabilize the economy, manage exchange rates, and facilitate international transactions.
How the US Crypto Reserve Will Function
The US crypto reserve is predicted to purchase and store various cryptocurrencies, making cryptocurrencies more mainstream as a legitimate financial instrument. However, there are still many questions on how the reserve will function and whether the federal government will provide a guarantee for losses held by investors.
Trump’s Change of Heart
In 2021, President Trump told Fox News that bitcoin "looks as if a scam," but he appears to be more upbeat concerning the cryptocurrency industry now. On the campaign trail, he vowed to create a strategic Bitcoin reserve and recently launched his own $Trump digital coin.
Cryptocurrencies Included within the US Crypto Reserve
The following are the five digital currencies that Trump said could be kept within the US crypto reserve:
Bitcoin (BTC)
Bitcoin is the best-known cryptocurrency and the biggest, with a market capitalization of $1.8 trillion. It was first created in 2008 by a developer or group of developers going by the pseudonym Satoshi Nakamoto, whose identity stays unknown. Bitcoin introduced the concept of blockchain technology, a distributed ledger that securely records all transactions across a network of computers.
Ethereum (ETH)
Ethereum was co-founded in 2015 by Vitalik Buterin, a Russian-born Canadian programmer, when he was 21. It was never intended to be a cryptocurrency but relatively a decentralized computing platform on which the whole lot from financial tools to games could run. Ethereum is the most well-liked platform for "smart contracts" — self-executing contracts with the terms of the agreement between parties directly written into lines of code that can not be reversed or modified.
XRP
XRP is a digital currency and native token of the XRP Ledger, which was created and launched in 2012 by the American technology company Ripple. The XRP Ledger is an open-source, decentralized blockchain designed to facilitate fast, low-cost, and energy-efficient transactions. XRP transactions may be processed rapidly — taking between 3 and 5 seconds — which lends itself to cross-border payments.
Cardano (ADA)
Cardano was founded in 2015 by Charles Hoskinson, one in all the co-founders of Ethereum, and launched in 2017. The native cryptocurrency of the Cardano platform is named ADA, named after Ada Lovelace, a Nineteenth-century mathematician who is commonly thought to be the primary computer programmer. Cardano sees itself as a "third-generation" blockchain, addressing the constraints of first-generation blockchains like Bitcoin and second-generation blockchains like Ethereum.
Solana (SOL)
Solana, one other decentralized blockchain platform, was founded in 2017 by Anatoly Yakovenko, a former Qualcomm engineer, together with Greg Fitzgerald and Stephen Akridge. It was officially launched in 2020 by the Solana Foundation, a non-profit organization based in Geneva, Switzerland. Solana has made headlines in recent months since it was the platform utilized by Donald and Melania Trump to launch their very own cryptocurrencies, $Trump and $Melania.
Conclusion
The creation of a US crypto reserve is a big step towards making the US the crypto capital of the world. The inclusion of Bitcoin, Ethereum, XRP, Cardano, and Solana within the reserve is predicted to extend their value and make them more mainstream. However, there are still many questions on how the reserve will function and whether the federal government will provide a guarantee for losses held by investors. As the cryptocurrency industry continues to evolve, it can be interesting to see how the US crypto reserve develops and the way it can impact the worldwide economy.
