Trump Faces Blowback Over Plans for Crypto Reserve

Cryptocurrencies are again riding high, after President Donald Trump announced that he would create a national crypto reserve with five tokens, including three lesser-known and highly volatile ones.
It's the latest boost Trump has given the crypto industry, which spent some $130 million backing him and other Republicans. But the news drew criticism from many, including conservatives and even ardent crypto backers, over many concerns: giveaways to a wealthy community, delegitimizing the digital currency industry and more.
"I will make sure the U.S. is the Crypto Capital of the World," Trump declared on his Truth Social network Sunday in announcing the reserve, which would involve the federal government stockpiling five tokens: two well-established ones (Bitcoin and ether) and three newer ones (XRP, solana and cardano).
Proponents say a reserve would help taxpayers benefit from crypto's price growth. It's still not clear how such a reserve would work or when it would be introduced, though a Republican-authored bill in the Senate would direct the government to buy 1 million bitcoins -- $92.6 billion at today's prices -- over five years.
The plan is music to the ears of many in the crypto industry, who have already benefited significantly from Trump moves like picking regulators who will go easier on digital currencies. The price of bitcoin alone has jumped 36% since the election.
Critics of all political stripes decried the move. Some Republicans raised questions about spending taxpayer money on risky assets instead of paying down the national debt. Joe Lonsdale, a friend of Elon Musk, wrote on X: "It's wrong to steal my money for grift on the left; it's also wrong to tax me for crypto bro schemes."
Some protested the seeming latest conflict of interest involving Trump and crypto, noting that Trump profited from promoting the so-called memecoin $Trump before his inauguration. (The SEC last week said memecoins wouldn't be subject to regulatory oversight.) "This is getting egregious," software developer Nikita Bier replied to Lonsdale's post. "Every 2 weeks there is a kickback to the family."
"Completely delegitimizes all the work DOGE is doing," he said, referring to Elon Musk's government initiative that purports to dig out fraud.
Others questioned whether David Sacks, the investor who is Trump's crypto czar, also stands to benefit from such a reserve. Sacks wrote on X that he had sold his cryptocurrency holdings, but didn't address any holdings his investment firm has in crypto startups. Sacks will chair a first-of-its kind crypto White House summit Friday intended to discuss ways to spur innovation and growth in the sector.
This poses a longer-term question. Judging by Sunday's rally in crypto assets, this could vastly benefit crypto investors, who showed that they're willing to inject huge sums into politics. Could such an explicitly beneficial policy for crypto give them even more ammunition to influence future elections, further reshaping government in their favor?
This article originally appeared in The New York Times.