Remind the American public and investors why you need a Bitcoin reserve at all.
Well, good to be here. The reason why we need a Bitcoin reserve is that the federal government already owns some. In fact, it obtained around 400,000 Bitcoin over the past decade through criminal and civil forfeitures and seizures. The government has to have a strategy for how it deals with this. In the past, the strategy has been simply to sell it in an ad hoc way, almost willy nilly, and that cost American taxpayers something like $17 billion in lost value. So we want to have a long term strategy to maximize the value of these holdings. We've decided that Bitcoin is scarce, it's valuable, and it is strategic for the United States to hold on to this as a long term reserve asset. That's the plan with the 200,000 Bitcoin that we believe are in the possession of the federal government. I say we believe because no one really knows for sure because we never had a proper audit. So that's one of the first things that this executive order provides, that we're going to do a full government wide audit to find out what digital assets we actually have so they can be safeguarded and moved into a strategy that maximizes their long term value.
Right. And then there's the stockpile. Talk to us about the nuance there and why you need to stockpile for altcoins and how you're treating them differently.
Right. Well, the idea there is, again, we're going to figure out what do we actually have on the federal balance sheet and we're going to move those, like you said, all coins or digital assets other than Bitcoin into a stockpile for safekeeping. The difference there is that the secretary, the Treasury will exercise responsible stewardship over those assets, and he has the discretion to rebalance the portfolio or to sell items in that portfolio. But that's not true for Bitcoin. The Bitcoin we want to keep long term. So there's a difference there in objective with the Reserve. The goal is long term preservation with the stockpile. The goal is responsible stewardship, the portfolio management and assets.
David, the executive order also tasked Secretary Lutnick and Bessant with finding budget neutral ways that won't cost the taxpayer to add to that reserve. What qualifies as budget neutral? Can you give us some examples of how that would actually work?
Well, budget neutral means it won't cost the taxpayer anything. It won't increase the deficit, it won't increase the debt. So that's basically the constraints on what they can do. If they can figure out creative ways to add to the stock, to the reserve of Bitcoin, they're allowed to accumulate more Bitcoin. But again, it cannot impose any burden on the federal deficit, debt or the taxpayer. So that's the rule. Now, you can ask the question, well, how are they going to do that? And I think that's sort of up to them. If they can figure out creative strategies that they believe are in the long term interest of the country, they now have the authorization to develop those strategies.
Do you think using savings that come from Doge, for example, qualify as something that would be budget neutral?
That's a good question. I don't know the answer to that question. I think that that's something that has to be assessed by probably the Office of Management and Budget. I think that since Doge is cutting the deficit, and that we want to seek a way to rescind those appropriations, it probably would not count. But you probably have to ask the OMB that.
When you talk about the stewardship, particularly the stockpile, could you be seeing things like staking lending? Is there going to be other ways to maximize the volume?
It's a good question. I think that the idea of this executive order is to create the mandate. Right. So, first of all, we're going to move these digital assets from wherever they are all over the government. We're going to find out what they are. First of all, we're going to do the accounting, we're going to do the audit. Then we're going to move them into a separate account for safekeeping. And then the secretary of the Treasury and his team will be able to exercise portfolio management and long term and responsible stewardship. And yes, that could include staking, it could include rebalancing, it could include sales. These are all options that they can pursue if the secretary of the Treasury believes that these are in the long term interests of the American people.
Just going into what's in the holding of the US government, going back to what President Trump mentioned over the weekend, talking of Ripple's Solana, other alternative coins that people are wondering whether they're going to be included in this stockpile. Will they? Does the US own them? Why mention them by the president?
Well, the president has mentioned the top five cryptocurrencies by market cap. So I think people are just reading into this a little bit too much. He just mentioned the top five in terms of what we'll actually have. Again, we have to do the accounting. We're not sure sitting here today whether the federal government owns any of these alternative cryptocurrencies. We know it owns Bitcoin. I believe it owns some Ethereum. I'm not sure about the other ones. That's why we have to do the accounting, is that to be honest, no one's been able to give us a straight answer yet in terms of what the federal government owns. And this is part of the problem is that we've never really had a digital asset strategy before. And this is why we've missed out on accumulating a lot of value for the American people.
David, you mentioned earlier that you don't have any additional cryptocurrency assets and where you've divested from your interest there. However, Secretary Lutnick in July mentioned that he had, quote, a shed load of Bitcoin. Do you think it's important for these stewards of the reserve and the stockpile to divest from their cryptocurrency interests? Do you know if they've done so already?
I can't speak to the situation. Every member of the administration has to go through the same ethics process and the same conflicts of interest process that I've gone through. So I'll let him speak to his own situation. I can just say that in my case, I divested or sold all the cryptocurrency that I owned prior to the start of the administration. So there's no conflict in my case. I just want to have the right innovation policies for the United States.
Do you think it's important, though, to just not have that appearance of a conflict of interest?
Sure. I mean, look, we're all subject to 18 U.S.C. 208. These are the conflict of interest provisions. Every member of the administration is subject to that. But I'm not going to speak to anyone's situation. So we all are governed by the same conflict of interest rules. In my case, I chose to divest everything to make it really simple. You should ask every other member of the administration what their situation is.
How about the president? Because I think herein lies some of the issues for those who are on the outside of crypto looking in and suddenly feel that the US President has an exposure to meme coins or Solana. How do you give the confidence to the US investor base and indeed US population that this is totally legit?
Well, honestly, I think you're kind of making something up there. I mean, how do you know that he has exposure? Is that something you just came up with?
Well, ultimately, when we think about the meme coin exposure in particular and people trying to understand for what reason we have a Trump coin or Melania Trump coin. Is there a clearer way that the US president can disassociate himself from any event in upside when it comes to cryptocurrencies?
