What is the status of the process of creating a Strategic Bitcoin Reserve in the USA? Here are all the details you need to know.

A proposal to create a strategic Bitcoin reserve, once seen as a far-fetched idea, has started to gain attention in the US with the support of former President Donald Trump.

Supporters consider this a bold move to secure America's financial future, while critics argue that it could jeopardize the decentralized nature of Bitcoin and lead to complex economic challenges.

The concept of a national Bitcoin reserve was proposed by Dennis Porter, co-founder of Satoshi Action Fund, a non-profit organization established in 2022 to promote the adoption of Bitcoin at the state and federal levels. This proposal, once a small idea, gained momentum after Trump openly supported it during a Bitcoin conference held in Nashville, Tennessee in July.

At the beginning of this month, Trump, who appeared on CNBC, expressed his support for the idea when asked if the federal government foresaw a strategic crypto currency reserve similar to the oil reserves. Trump replied, "I think so," and added, "We will do great things with crypto."

Porter views Trump's support as a turning point that encourages other politicians to embrace this concept.

Republican Senator Cynthia Lummis from Wyoming has emerged as one of the leading advocates for a federal Bitcoin reserve. This summer, she introduced a bill proposing that the US government purchase 1 million Bitcoins within five years. Lummis argues that such a move could help solve the national debt problem, which has reached 36 trillion dollars, and strengthen America's leadership in financial innovation.

Lummis said, “My generation has spent federal dollars with abandon for years,” and added, “A strategic Bitcoin reserve gives us the chance to pay back almost half of our national debt in the next 20 years and allows us to remain leaders in 21st century finance.”

This idea has received support from both parties. Democratic Representative Ro Khanna from California suggested that instead of selling Bitcoin seized from criminal activities, it should be kept as part of the government's reserves.

Lummis's plan to finance Bitcoin purchases includes the revaluation of the United States' gold reserves, which are currently well below the market rate of about $2,650 per ounce, calculated at a price of $42 per ounce. By adjusting the valuation, the government could theoretically generate paper profits to finance Bitcoin purchases without issuing new debt or increasing taxes.

However, critics argue that this approach will not be fruitless. Monetary economist George Selgin described the plan as a "backdoor credit" based on financial maneuvers to bypass traditional allocation processes.

The proposal has met with significant backlash from Bitcoin supporters who see government intervention as contrary to BTC's original decentralized vision.

Bitcoin Magazine's editor-in-chief, Mark Goodwin, expressed concerns that a government-controlled Bitcoin reserve could hinder the development of BTC as a decentralized currency and strengthen the traditional financial system.

Former investment banker and federal official Kathryn Austin Fitts argued that the plan benefits wealthy Bitcoin holders by creating a guaranteed buyer. She lamented that Bitcoin, once designed as a revolutionary payment system, has turned into something she referred to as a 'pump-and-dump financial product.'

Despite the criticisms, Porter and his team continued to push this idea at both the federal and state levels. Last week, Texas introduced a bill to create a Bitcoin reserve at the state level, and similar proposals have emerged in Pennsylvania and Ohio.

According to Porter, the fight for Bitcoin reserves is more than just about the economy. He said, "Bitcoin is too important to give up on this fight."

US President Donald Trump, who supports the idea, will take office on January 20th.