How The White House Should Structure The Crypto Strategic Reserve

A Proposal to Bring Together the Bitcoin and Crypto Communities

This week, President Trump announced that the Bitcoin Strategic Reserve will now be a Crypto Strategic Reserve, expanding beyond Bitcoin to include Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA). 

The announcement sparked mixed reactions. Bitcoin maximalists argue that only Bitcoin deserves a place in the reserve, while communities supporting Ethereum, Ripple, Solana, and Cardano are celebrating the recognition. Meanwhile, many are questioning why BNB Smart Chain (BNB), the fifth-largest cryptocurrency by market capitalization, was excluded. 

While expanding the reserve beyond Bitcoin is a bold (and to some controversial) step, it is crucial that the White House structures this initiative with a clear framework that accounts for the distinct characteristics of these digital assets. If the goal is to position the U.S. as the global leader in crypto, the administration must take a nuanced, strategic approach. 

Not All Cryptocurrencies Serve the Same Purpose  

One of the most critical considerations is understanding that not all cryptocurrencies are the same. They serve different functions in the digital economy, and a one-size-fits-all approach would be misguided. 

• Bitcoin (BTC) is the world's first and most dominant cryptocurrency, widely recognized as a store of value akin to gold. Federal Reserve Chair Jerome Powell has even referred to it as “digital gold.” Its primary use case is preserving purchasing power, which is increasingly vital in a world where rising prices and currency devaluation is a persistent issue for people globally.  

• Ethereum (ETH) is the second-largest cryptocurrency, but its primary function differs significantly from Bitcoin. Ethereum introduced one of the first widely adopted Turing-complete blockchains, enabling the creation of smart contracts and decentralized applications (dApps). Other blockchain networks—such as Solana, BNB Smart Chain, and Cardano—are competing in this space, each striving to become the dominant platform for developers building the next generation of financial and digital services. 

Beyond these, there are stablecoins, non-fungible tokens (NFTs), meme coins, and other digital assets, each with unique use cases. As blockchain technology matures, we will continue to see new categories emerge. Michael Saylor's digital asset taxonomy acknowledges this diversity, providing a structured framework for understanding these assets. 

What Is the Purpose of the Crypto Strategic Reserve? 

Before structuring this reserve, the White House must answer a fundamental question: What role will the Crypto Strategic Reserve serve? Will it function as a sovereign wealth fund, an innovation accelerator, or a strategic financial hedge? 

I propose a two-pronged approach to the Strategic Crypto Reserve to ensure it serves both fiscal responsibility and technological advancement: 

1. Establish a Strategic Bitcoin Reserve (SBR) 

As proposed by Senator Cynthia Lummis, a Strategic Bitcoin Reserve should be created specifically to pay down the national debt. Bitcoin, as a scarce, decentralized store of value, serves an entirely different purpose than other cryptocurrencies. The SBR should not be mixed with other blockchain-based assets, as its role is to strengthen U.S. financial sovereignty and hedge against monetary debasement. 

2. Create a Crypto Research and Innovation Fund  

Beyond Bitcoin, the federal government will need to hold and use other cryptocurrencies for research and innovation. A Crypto Research and Innovation Fund should be established as the primary vehicle for acquiring and utilizing these assets across government agencies. 

This fund would enable experimentation, testing, and development of blockchain applications within the public sector while ensuring responsible use—strictly for research and innovation, not speculative investment. It would provide the necessary resources for agencies to interact with emerging blockchain networks, explore decentralized applications, and integrate blockchain-based infrastructure where applicable. 

Real World Need for a Crypto Research and Innovation Fund 

In open-source smart contract platforms like Ethereum, ether (ETH) is required to execute transactions and power decentralized applications (dApps). As the native asset of the network, ETH serves as fuel for processing smart contracts and securing the blockchain. For any entity—including the government—that wants to develop or interact with Ethereum-based applications, access to ETH is essential. 

If the federal government were to build an open-source blockchain application for public-sector use (more on that below), it would need access to the necessary cryptocurrencies to operate the system effectively. 

A real-world example of this challenge occurred several years ago when the National Institute of Standards and Technology (NIST) faced barriers to researching Ethereum because it was prohibited from holding ETH. This outdated restriction prevented hands-on government experimentation with a transformative technology that has reshaped digital markets, enabled decentralized finance (DeFi), and is driving the next era of innovation beyond traditional financial systems. 

A Crypto Research and Innovation Fund would solve this problem by allocating cryptocurrencies to government agencies for blockchain testing, research, and implementation—ensuring the U.S. remains at the forefront of technological innovation. 

Future-Proofing DOGE with Blockchain  

The Crypto Research and Innovation Fund could also enhance government transparency and accountability by leveraging blockchain for financial oversight. 

I strongly support the work being done by Elon Musk and the Department of Government Efficiency (DOGE) to uncover waste, fraud, and abuse relating to taxpayer funds. We must modernize our infrastructure to ensure fiscal accountability. 

One solution is to require all federal funding, foreign aid, and taxpayer-funded payments to be tracked on a blockchain. This would create a tamper-proof, cryptographically verifiable ledger ensuring funds are used as intended. Blockchain technology has the power to eliminate entire categories of financial fraud and increase government efficiency. 

The Crypto Research and Innovation Fund would hold the crypto tokens necessary for the appropriate government agency to develop this potential application for the federal government's use.  

The Role of the Private Sector and Web3 Innovation 

While the private sector should take the lead in commercializing blockchain development, the federal government must create an environment that fosters innovation. This is the approach the U.S. took with the internet in the 1990s—incentivizing private-sector growth while maintaining strategic oversight. 

Web3 is the next phase of the digital economy, and it's imperative that U.S. policymakers recognize that different cryptocurrencies serve different purposes. By establishing a clear, structured framework for the Crypto Strategic Reserve, the administration can both safeguard national interests and cement the U.S. as the global hub for digital assets.