President Trump has proposed the Federal government hold digital currencies, and some media and political people have pushed back with dire warnings of the impact on the U.S. dollar. But the reality of Trump’s proposal differs sharply from that painted by Trump’s hysteric critics. BTC is not a threat to the U.S. dollar and U.S. government holding of BTC or any other digital currencies is not an endorsement.

The U.S. dollar still dominates the world, representing nearly 60% of all currency held by central banks, as of Dec. 2024, according to the IMF. Unlike fiat currencies, bitcoin and other digital currencies are not governed by any central bank. So, there is no way to ever have an adversarial relationship with the issuer of BTC – unlike the issuer of Chinese yuan or Russian rubles.

Most of the forex reserves held by the U.S. are euros and Chinese yuan. But no one is calling for the U.S. to stop holding euros. That’s because holding a currency in reserve is not an endorsement of that currency. Countries hold forex reserves primarily for liquidity purposes – mainly to facilitate foreign trade wi

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Author: Chip Daniels