A brand new Home invoice launched Friday would lock in President Trump’s unprecedented government order establishing a Strategic Bitcoin Reserve, signaling the GOP’s deepening embrace of digital belongings as fiscal and geopolitical leverage instruments.
The invoice, H.R. 3798, sponsored by Rep. Tim Burchett (R-TN), goals to codify Govt Order 14233, signed by Trump.
The order halted federal Bitcoin auctions and directed businesses to consolidate BTC holdings beneath Treasury’s administration. If enacted, the laws would make sure the long-term existence of a U.S. Bitcoin reserve and a Digital Asset Stockpile for seized altcoins, shielding this system from future repeal.
“It’s time we handled Bitcoin just like the strategic asset it’s,” Burchett stated in an announcement.
From forfeiture to fortress
Over the previous decade, the U.S. authorities has amassed 198,000 BTC, at present valued at over $21.32 billion, by way of forfeitures linked to felony enforcement actions. Up to now, a lot of that Bitcoin was auctioned off, together with massive gross sales in 2014–2021 at fractions of right now’s costs.
These early auctions forfeited over $21 billion in upside features. EO 14233 and now Burchett’s invoice goal to cease the bleeding by treating the digital foreign money as a long-term strategic hedge reasonably than liquidating it for short-term money.
“That is our digital Fort Knox,” Treasury Secretary Vivek Ramaswamy stated on the March rollout, promising “budget-neutral and innovation-positive” implementation.
Below the invoice, no taxpayer {dollars} could be spent to amass extra Bitcoin. As an alternative, BTC should come from future enforcement seizures, asset swaps, or market-neutral transfers. Altcoins acquired in comparable methods could be held in a separate “Digital Asset Stockpile,” which the Treasury might promote at its discretion.
The laws mandates inter-agency BTC transfers to Treasury custody and bars any gross sales with out presidential waiver, successfully nationalizing the U.S. authorities’s Bitcoin place except reversed by future laws.
A strategic hedge or digital gamble?
Supporters examine the reserve to a digital gold normal, a decentralized asset resistant to inflation, geopolitical manipulation, or central financial institution defaults. The reserve’s proposed five-year goal is 1 million BTC, about 5% of the full provide.
“That is our Louisiana Buy second,” stated Sen. Cynthia Lummis (R-WY), who plans to introduce a Senate companion invoice this week.
However critics argue that Bitcoin’s volatility and cybersecurity dangers make it a poor candidate for a nationwide strategic asset. Rep. Brad Sherman (D-CA), a vocal crypto skeptic, referred to as the invoice “crypto cosplay that dangers taxpayer {dollars} and world credibility” at an April Home Monetary Companies listening to.
The legislative push comes because the Federal Reserve continues exploring a CBDC, which Trump has vowed to dam. “Not on my watch,” the President stated on the Bitcoin 2024 convention final 12 months.
That convention additionally marked the primary public unveiling of the reserve idea, a marketing campaign promise that has since morphed into federal coverage, and now, presumably regulation. Presidential Govt Orders are usually not regulation except ratified by Congress.
With Bitcoin reaching an all-time excessive of $111,900 in Might and company treasuries rising BTC allocations, Burchett’s invoice faucets into rising perception in Bitcoin as a monetary backstop.
What Comes Subsequent
H.R. 3798 has been referred to the Home Monetary Companies Committee. Chair Patrick McHenry (R-NC) is anticipated to schedule a listening to this summer time, with Senate motion prone to comply with.
How Treasury will securely handle BTC custody, whether or not by way of chilly wallets, multisig preparations, or third-party custodians, stays an open query.
Additionally it is unclear how reserve holdings would possibly have an effect on broader fiscal or financial coverage, together with debt ceiling negotiations or Federal Reserve collateral frameworks.