U.S. President Trump signed an executive order to establish a strategic Bitcoin reserve on Thursday local time, a day after meeting with cryptocurrency industry executives at the White House. White House cryptocurrency expert David Sacks said in a post on social media platform Sachs wrote that the order authorizes the Treasury and Commerce secretaries to develop "budget-neutral strategies" to acquire more Bitcoin as long as it does not increase the cost to U.S. taxpayers.
Bitcoin and other token prices fell after Sacks said taxpayer money would not be spent on cryptocurrencies.
As of press time, Bitcoin fell 4.47% on the day to US$87,895 per coin.
Those attending Friday's White House cryptocurrency summit expect the event to be the stage for Trump to formally announce plans to create a strategic reserve containing Bitcoin and four other cryptocurrencies.
Earlier this week, Trump announced the names of five digital assets he expected to be included in the reserve, with each asset seeing a sharp increase in market capitalization. The president said the five assets are Bitcoin, Ethereum, XRP, Solana and Cardano.
It's unclear how the reserve will work or how it will benefit taxpayers.
Trump's moves to support the cryptocurrency industry have sparked concerns among some conservatives and cryptocurrency supporters, who believe that these policies are both "payouts" to the wealthy and could damage the credibility of the digital currency industry. The cryptocurrency industry has spent millions of dollars supporting Trump and other Republicans in last November’s election.
Supporters believe the reserve will help taxpayers benefit from cryptocurrency price growth.
The president’s support for the crypto industry has also raised questions about conflicts of interest. The Trump family launched a cryptocurrency meme coin and personally holds shares in the crypto platform WorldLibertyFinancial.
Trump has handed over control of his business ventures, which are under review by outside ethics lawyers, his aides said.