US President Donald Trump signed an Executive Order creating a Strategic Bitcoin Reserve on March 6, alongside a United States Digital Asset Stockpile to manage its other digital assets. “Because there is a fixed supply of BTC, there is a strategic advantage to being among the first nations to create a strategic bitcoin reserve,” said the order.
The Reserve and Stockpile will consist of virtual assets confiscated by US government agencies as part of criminal or civil asset forfeiture proceedings. The order prohibits all government departments from selling or disposing of any BTC or digital assets that they hold. Instead, they must turn it over to the United States Secretary of the Treasury.
Background
Trump had initally announced the creation of a strategic cryptocurrency reserve on March 2, via a post on Truth Social. He initially stated that the reserve would include the cryptocurrencies XRP, Solana (SOL) and Cardana (ADA), later adding that the two largest cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) would be the “heart of the Reserve.” The announcement caused the cryptocurrency market to surge, with Bitcoin jumping 10% and Ethereum almost rising 13%.
Trump is a vocal supporter of cryptocurrencies and is planning to host a Crypto Summit at the White House this Friday, bringing together the sector’s biggest players. He departed significantly from his predecessor Joe Biden, whose administration saw the Securities and Exchange Commission (SEC) crackdown on cryptocurrencies over compliance issues. Notably, Trump is now the first US President to have his own meme coin.
This shift in America’s approach towards cryptocurrencies might have implications for India as well. Last month, the Department of Economic Affairs (DEA) Secretary Ajay Seth indicated that the government was reconsidering its policy stances given changes in other jurisdictions. Reserve Bank of India (RBI) Governor Sanjay Malhotra also made a similar statement regarding the central bank’s position.
The Indian government and RBI have traditionally held a hardline stance against the digital asset, with former RBI Governor Shaktikanta Das warning last October that cryptocurrencies posed great risks to financial stability.
Reactions In India
Trump’s announcement has led to buzz among stakeholders in the industry. Santosh Panda, Co-Founder of Foundership, a venture capital firm focused on Web3 & AI startups, advocated for India to have its own strategic crypto reserve. “Once you have a strategic reserve, you’re part of an ecosystem, you’re going to also be included in the future direction of this industry,” he said.
For Panda, it was important for India to be involved in the cryptocurrency conversations of the future and could not afford to dismiss it as a gimmick any longer. He emphasised that such a strategic reserve could open up a new paradigm of thinking for India’s position on cryptocurrencies. It would allow India to explore the possibilities of this new industry and have a say in the digital asset economy.
However, not all Indian stakeholders are enthusiastic about cryptocurrencies. Srinath Sridharan, Corporate Advisor and a Policy Researcher recently wrote an article for CNBC TV18, arguing that India should remain cautious about cryptocurrencies. He highlighted Trump’s personal financial investments in cryptocurrencies and the role of crypto transactions in terror financing. Instead of following the US, Sridharann argued that India should increase scrutiny on crypto exchanges, prioritise the Central Bank Digital Currency (CBDC) and work towards global cooperation in cryptocurrency regulation.
Crypto Is Still Very Risky
Speaking to MediaNama, Sridharan expressed skepticism towards the idea of a strategic cryptocurrency reserve for India.
“A national crypto reserve may sound bold, but the risks far outweigh the benefits. Cryptocurrencies remain highly volatile, prone to hacking, and lack the intrinsic value or stability required for sovereign reserves. Unlike gold or foreign exchange, they operate beyond regulatory control, making them a liability rather than a strategic asset,” he said.
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“If national security necessitates some exposure to digital assets, a discreet, off-the-books allocation—if not already in place—would be far wiser than jeopardising the stability of our financial system. Until global regulatory frameworks evolve and systemic risks are addressed and collectively regulated, India has no reason to experiment with the foundations of its economy,” he added.
Sridharan was also skeptical of cryptocurrencies and argued that it was impossible for the RBI to properly regulate transactions of cryptocurrencies held in private wallets. He provided the following example: “Say you’re sitting on a wallet worth $2 million. And RBI regulations say that more than $50,000 cannot be remitted outside India. What stops you from giving Bitcoin to your friend in New York?” Furthermore, Sridharan pointed out that while the crypto industry had implemented anti-money laundering and Know Your Customer (KYC) methods, they would not be able to govern the transactions taking place.
Where Does Bitcoin’s Value Come From?
He also questioned the underlying value of cryptocurrencies. Sridharan argued that unlike capital markets, where valuation is based on a company’s Profit After Tax (PAT) and future potential, cryptocurrencies’ value is entirely arbitrary and is apparently based on scarcity value.
“The concerns of financial regulators are that when you’re linking it to national currencies, there must be an exchange rate applicable and a basis for valuations of the underlying asset. On what basis will you agree on it?” he asked.
However, he argued that the government should bring in a regulatory framework for Virtual Digital Assets (VDAs) to eliminate the current grey areas.
“India needs a clear regulatory framework for VDAs, and it may be feasible to have it under SEBI’s purview. This would provide oversight, investor protection, and a structured approach to dealing with digital assets,” he said.
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