Can your Bitcoins be confiscated if Trump creates a national reserve? Analyst says government can adopt carrot and stick policy

The expectations of a US strategist Bitcoin BTC/USD The reserve subsequently rose sharply Donald Trump’s Presidential victory, with the cryptocurrency sector firmly behind the ambitious idea.

Trump called for a strategic national Bitcoin stockpile at a conference earlier this year while speaking out against the sale of government Bitcoin stockpiles.

While nothing concrete has come from Trump since this advocacy, his Republican colleagues, particularly Sen. Cynthia Lummis (R-Wy.) have proposed a bill called the BITCOIN Act that would require the purchase of one million bitcoins over five years.

People associated with the digital assets industry have given positive approval to the idea.

The pro and con debate

Joe McCannFounder and CEO of a cryptocurrency hedge fund Asymmetrical, Benzinga said the move could position the US as a “leader in crypto.”

McCann said that as reserves gain more traction and become closer to reality, it will likely provide a significant boost to Bitcoin’s rise.

“The market is already somewhat anticipating the potential impact, but I don’t think many people have ‘priced in’ the idea that if this were to actually be passed (BITCOIN law), other countries would also want to acquire a percentage of the whole thing Bitcoin supply for their reserves, leading to even more demand.”

See also: Michael Saylor says Bitcoin could add nearly $5 trillion to Microsoft’s valuation and add $584 to its stock by 2034

However, critics like Peter Ship have criticized the idea, predicting that such a move would lead to a devaluation of the dollar and hyperinflation as the government would have to print more money to buy more Bitcoin.

In defense, Lummis claimed that the government did not need to spend “new dollars” to finance the purchases. Instead, it could use Federal Reserve-held gold certificates currently valued at 1970s prices, update them to fair market value, and then sell them to buy Bitcoin.

Are your Bitcoin holdings at risk?

Another, less discussed aspect of a potential reserve is whether it would give the federal government ultimate authority to hold Bitcoin given Bitcoin’s limited supply. And whether the government would issue something similar in an emergency Franklin D. Roosevelt Executive Order 6102 of 1933, which required Americans to surrender a large portion of their gold holdings to the Federal Reserve.

“Bitcoin is a completely different animal than gold. It is not tied to our monetary system like gold was in 1930.” Neil BergquistCEO of the cryptocurrency exchange headquartered in Seattle Coinme, said.

“Seizing an individual’s Bitcoins would be a logistically and legally complex process since they are on a decentralized blockchain, and such seizure actions would likely be classified as illegal,” he argued.

Denis SklyarovCEO and co-founder of a decentralized physical infrastructure company WiFi card, also agreed that the digital, decentralized nature of Bitcoin would make such an endeavor difficult.

“Furthermore, legal and cultural changes in the U.S. over the last century emphasize financial freedom and personal property rights, making such broad confiscation nearly impossible under current law,” he added.

McCann took a middle ground, saying the government would encourage people to sell Bitcoin voluntarily rather than force them to give up.

“If the US were to establish a strategic Bitcoin reserve, it could use tax breaks or premium buyback programs as a carrot instead of a stick,” he noted.

Bettors on the popular prediction market platform Polymarket The likelihood of Trump accumulating a Bitcoin reserve in the first 100 days of his presidency is currently priced at 29%.

Price action: At the time of writing, Bitcoin was trading at $96,474.28, down 0.29% in the last 24 hours, according to data from Benzinga Pro.

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