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Strategic crypto reserves: A new era for crypto currency regulation and central bank digital currencies?

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  • Ojo, Marianne

Abstract

The executive order signed by President Donald J Trump on the 6th March 2025, which establishes a U.S crypto currency reserve, “creates a Strategic Bitcoin Reserve that will treat bitcoin as a reserve asset.” Whilst there are enthusiasts in favor of the recent move, there are also concerns about how it will be implemented – as well as implications for taxpayers in the event of a collapse in prices. Concerns are consolidated further, primarily because there are several Bills still being considered in Congress – compounded with recent developments and turbulence in the crypto assets sector. Further concerns, primarily relate to governmental and political interference with the central bank’s role in monetary policy setting and, regulatory uncertainties. This paper considers, as well as highlights, why the central bank’s independence is pivotal to its functions. Whilst close collaboration with the executive, and the legislature, are also essential to its functioning, the section also highlights the immense contributions that can be derived from crypto currencies and stable coins – when adequately regulated. The third section then considers main issues to be addressed. This will be followed by a conclusive section.

Suggested Citation

  • Ojo, Marianne, 2025. "Strategic crypto reserves: A new era for crypto currency regulation and central bank digital currencies?," MPRA Paper 123994, University Library of Munich, Germany, revised Feb 2025.
    • Handle: RePEc:pra:mprapa:123994
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    central bank digital currencies (CBDCs); strategic crypto reserves; central bank independence; digital currencies; Bitcoin; inflation; monetary policies; crypto assets; financial stability; regulation; stable coins;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G1 - Financial Economics - - General Financial Markets
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • K2 - Law and Economics - - Regulation and Business Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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