During the Cold War, the United States and the Soviet Union battled not with bullets but with technology. Nowhere was this competition fiercer than in the Space Race. The two global superpowers marshalled the greatest engineering minds of the 21^st century in a bid to secure supremacy in space exploration. By landing the first man on the moon in 1969, the United States won the Space Race—and ultimately the Cold War.

The lessons of the Space Race are especially relevant today in view of emerging competition in a new domain: blockchain. And former President Donald Trump appears to be taking these lessons to heart.

In a Truth Social post last month, Trump warned of the danger of letting China and Russia dominate the digital asset economy. To counter this threat, Trump said, “We want all the remaining Bitcoin to be made in the USA.” He expanded on these comments in an interview with Bloomberg last week, warning of the consequences the United States would suffer if it failed to win the new race for bitcoin hegemony. “If we don’t do it, China is going to pick it up,” said Trump. “I don’t want to be responsible for allowing another country to take over this sphere.”

Trump’s embrace of bitcoin and his recognition of its geopolitical significance is fueling talks among policymakers of classifying bitcoin as a strategic reserve asset.

But what exactly is a strategic reserve asset? What would be the incentive to classify bitcoin as one? And how could the United States ultimately use this cryptocurrency to strengthen its position in the global financial system?

What Is A Strategic Reserve Asset?

A strategic reserve asset is a resource that a state accumulates to strengthen its defenses, stabilize its economy, or secure a competitive advantage over other states. Examples of strategic reserve assets include commodities like gold, oil, agricultural goods, and critical minerals. Countries often draw on these reserves in times of war, pandemic, natural disaster, economic crisis, or other national emergencies.

Understanding gold’s role as a bargaining chip among nation-states is critical to understanding the role bitcoin could play as a strategic reserve asset—and how it could give the United States an edge over its adversaries.

Bullion Vs. Bits

Countries stockpile gold bullion in the leadup to war and during periods of global economic uncertainty. As a universally recognized store of value, gold acts as a hedge against inflation and an alternative to holding foreign currencies and other assets. The shiny metal affords central banks a higher degree of autonomy from the global financial system, which is dominated by the United States.

For this reason, China and Russia have shed billions of dollars in U.S. Treasury holdings while significantly increasing their gold reserves. Both China and Russia hold approximately 2,300 tonnes of gold and are the largest and second-largest producers of gold respectively.

China and Russia’s gold spree is an attempt to reduce dependence on the dollar as they attempt to build an alternative axis of power to the U.S.-led world order. Gold is the strategic reserve asset these states depend on to give themselves some measure of autonomy from the U.S. financial system. And they are likely to accumulate even more as part of their efforts to challenge dollar hegemony.

But what if an alternative asset could blunt China and Russia’s flight from the dollar to gold?

This is where bitcoin could play a critical role.

Countering China And Russia With Bitcoin

As a form of “digital gold” with the potential of higher returns for buyers, bitcoin is uniquely positioned to complement physical gold as a strategic reserve asset.

Much like the shiny metal, bitcoin’s value derives from its scarcity and its emerging use cases as a store of value and a hedge against inflation. But bitcoin also possesses many qualities that arguably make it superior to gold. Bitcoin, for example, is easier to transport, more verifiable, and a harder form of money than gold itself because it is more scarce and more difficult to mine.

The United States can use bitcoin’s unique properties as a form of digital gold to deter China, Russia, and other competitors from leveraging their physical gold reserves to undermine US dollar dominance.

Classifying bitcoin as a strategic reserve asset would be the starting pistol in the “Bitcoin Space Race.” If the United States—the wealthiest country in the world and the home of global capital—begins accumulating bitcoin on its balance sheet, then other countries would have powerful incentives to do the same. This would send nation-state game theory into hyperdrive as sovereigns scramble to accumulate the scarcest monetary asset on planet earth.

In effect, the United States could slow—and possibly even reverse—the flight to physical gold by initiating a digital gold rush.

Matthew Pines, a national security fellow at the Bitcoin Policy Institute, wrote about this possibility in a recent report detailing bitcoin’s potential as an instrument of economic statecraft.

“From a national security perspective, key decision-makers may realize the fact that allowing bitcoin to monetize alongside (or outpacing gold) would disproportionately benefit the U.S.,” explained Pines. “That is, while China and Russia double-down on analog gold, the U.S. can countermove to digital gold.”

A ‘Trump Card’ Against Gold Weaponization

Another way of thinking about it: US policymakers could use bitcoin as a check against the weaponization of physical gold. As macro-investor and financial writer Luke Gromens explained, “China and Russia may try to leverage their gold reserves to neutralize the weaponization of the U.S. dollar against them. But the United States may now have a ‘Trump card’ in bitcoin.”

“Trump card,” is a fitting analogy, given the former President’s endorsement of the world’s largest digital currency. Trump’s public statements have sparked renewed interest in bitcoin as a strategic reserve asset on Capitol Hill. To take the temperature of lawmakers on this subject, I reached out to House Majority Whip Tom Emmer to get his perspective on the potential merits of putting bitcoin on the nation’s balance sheet.

“As the United States continues to embrace the ‘ownership economy,’ diversifying our investments is a common-sense next step,” said Emmer. “We have been exploring this issue for years and look forward to continuing the conversation with President Trump when he is reelected in November.”

Representative Emmer joins President Trump, Senator Lummis, and a growing cadre of policymakers who recognize that bitcoin is more than a financial experiment; it is a tool for projecting U.S. economic power.

Whether the United States will wield this tool to its full advantage will depend largely on the results at the ballot box this November.