KeyTakeawys:
- Australia rejects plans for a strategic crypto reserve despite U.S. initiative.
- U.S. crypto reserve announcement causes brief price surge, followed by declines.
- Industry experts highlight risks and volatility in establishing a crypto reserve.
The Australian government has confirmed it has no intention of setting up a strategic cryptocurrency reserve. This announcement came shortly after U.S. President Donald Trump revealed his plans for the United States to stockpile digital assets, including Bitcoin, Ethereum, Solana, XRP, and Cardano.
The Australian decision sets it apart from the U.S., which is actively working towards a government-backed crypto reserve, a move that has sparked debates and reactions from various corners of the cryptocurrency industry.
U.S. Announces Plans for Crypto Reserve
On March 2, President Trump unveiled plans to create a crypto reserve in the U.S., focusing on five digital assets: Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Cardano (ADA). The move is part of an initiative spearheaded by the President’s Working Group on Digital Assets, which aims to stabilize and elevate the cryptocurrency sector.
Read Also: Bitcoin, XRP, and Dogecoin Decline Amid Fears Over Trump’s Tariffs
Trump expressed that this reserve would respond to years of regulatory challenges faced by the crypto industry under the Biden administration. He further claimed that this initiative would reinforce the U.S.’s position as the global leader in cryptocurrency.
Despite the U.S. efforts, the Australian government has clarified that it will not follow suit. A spokesperson for Assistant Treasurer and Financial Services Minister Stephen Jones stated that Australia focuses on regulating the cryptocurrency market rather than establishing a reserve. The spokesperson confirmed that the government has no immediate plans to invest public funds in digital currencies.
Crypto Price Surge and Subsequent Decline
Trump’s announcement had a noticeable effect on cryptocurrency markets. ADA surged nearly 70%, while Solana and XRP saw increases of approximately 20% and 28%, respectively. Bitcoin and Ethereum also saw significant gains, rising 11% and 8%, respectively.
However, this spike was short-lived. Within 24 hours, most cryptocurrencies experienced a downturn, with Bitcoin dropping by over 9% and Ethereum falling by more than 10%. XRP, Solana, and ADA also experienced 9% to 15% declines.
Industry Experts Express Concerns
Several figures within the Australian cryptocurrency sector have voiced concerns over a strategic crypto reserve. Tom Matthews, head of corporate affairs at the Australian crypto exchange Swyftx, acknowledged the complexities of such a reserve.
He warned of potential concentration risks associated with holding large amounts of a few cryptocurrencies. Matthews also pointed out the volatility in crypto prices, which could pose challenges for a reserve aimed at providing economic stability during crises.
Samira Tollo, the Chief Technology Officer of the Australian crypto exchange Elbaite, questioned the inclusion of ADA in Trump’s reserve, noting its small market share of just 1%. Meanwhile, Brian Armstrong, CEO of Coinbase, suggested that Bitcoin might be the only cryptocurrency suitable for a reserve due to its established dominance in the market.
