[Washington, DC] – March 2025
In a move that has sent shockwaves through financial and political circles, reports suggest that the Trump administration may consider leveraging the United States’ massive gold reserves to fund a Strategic Bitcoin Reserve. While this proposal is still in early discussion phases, it has raised significant debate among experts, former Mint Directors, and market participants.
Bitcoin as the New Digital Gold?
Bo Hines, Executive Director of the Presidential Working Group on Digital Assets, revealed in a recent interview that one proposal on the table is to revalue the U.S. gold reserve and use the additional funds to accumulate Bitcoin.
“We view Bitcoin as digital gold,” Hines said. “That’s why we created the Strategic Bitcoin Reserve. It’s about long-term security for America’s economic strength.”
The administration is reportedly considering the idea of issuing updated gold certificates—revaluing gold at current market prices rather than its long-held $42.22 statutory valuation. This shift could potentially unlock hundreds of billions of dollars in nominal value.
Former Mint Directors Disagree: “Bad Central Banking”
Former U.S. Mint Directors Edmund Moy and Philip Diehl expressed strong skepticism. Moy noted that revaluing gold for the sole purpose of acquiring a volatile asset like Bitcoin could damage the trust and stability gold provides in central banking.
“Selling gold would tank the market and compromise a trusted, globally accepted store of value,” Moy told Kitco News.
Diehl echoed these sentiments, citing that even if revaluation occurred, the gold would remain under Congressional control.
“Even if Treasury gets the funds, the President can’t spend a dollar of it without Congressional approval,” Diehl emphasized.
Can the Federal Reserve Be Forced to Comply?
One proposed mechanism involves swapping outdated $42 gold certificates for new ones valued at $3,000/oz or higher, with the Federal Reserve covering the difference and transferring it to the Treasury. However, this would require Fed cooperation—something experts consider highly unlikely given the central bank’s independence.
Still, Moy suggests that if the Executive Branch and Congress align, pressure on the Fed could mount. “If it’s written into law, and Congress demands it, the Fed might have no choice,” he said.
Legislative Hurdles and Political Reality
Senator Cynthia Lummis, a known Bitcoin advocate, has reintroduced the Bitcoin Reserve Act to facilitate the process. But Diehl dismissed its chances in a divided Congress.
“It has little momentum, minimal co-sponsorship, and would require a supermajority to pass in the Senate,” he said.
Even red-state legislatures have rejected the idea of creating state-run Bitcoin reserves. Wyoming, Utah, and the Dakotas have all voted against allocating funds toward crypto assets.
“Bitcoin is speculative. Central banks are built on stability—not risk,” Diehl added.
Gold vs. Bitcoin: Central Banks Prefer Safety Over Speculation
While Bitcoin remains a high-growth, speculative digital asset, gold continues to be the preferred safe-haven for global central banks. Despite Trump’s crypto-friendly stance, experts argue that U.S. gold reserves play a critical role in backing the dollar and insulating the economy during global shocks.
“Even if you swap $1 worth of gold for $1 of Bitcoin, it’s not risk-neutral,” said Diehl. “Gold offers long-term reliability that Bitcoin simply can’t match.”
Market Reaction: Indifference Signals Low Confidence
Despite the bold proposal, neither gold nor Bitcoin markets have reacted significantly. Analysts note that if markets believed the U.S. would truly convert gold into Bitcoin, price volatility would be immediate.
“The market is yawning at this,” Diehl concluded. “There’s no indication that investors believe this plan is going anywhere soon.”
✅ Key Takeaways for Traders & Investors:
- Trump’s administration is exploring using U.S. gold to fund a Strategic Bitcoin Reserve.
- Experts say the plan is unlikely to pass legal, economic, and political scrutiny.
- Gold remains a trusted store of value—preferred by central banks globally.
- Bitcoin may offer upside, but it’s considered too risky for national reserves.
📌 Follow www.dailyforex.pk for real-time updates on global economic policy, forex, crypto, and gold market insights.