As previously mentioned by elected U.S. President Donald Trump during his campaign, he proposed the creation of a national-scale strategic Bitcoin reserve, with the U.S. government purchasing and holding one million Bitcoins.
That was the extent of the information until yesterday (December 18, 2024), when a document titled “Executive Orders” related to the strategic reserve was shared on X (formerly Twitter). The document, presented by the @btcpolicyorg account, is considered an early draft addressing key points deemed important by the organization.
Objectives and Policies for the Strategic Bitcoin Reserve
The executive order document describes Bitcoin as a strategic asset that can enhance the resilience of the U.S. dollar and calls for the establishment of a Strategic Bitcoin Reserve (SBR) as a permanent national asset for economic security.
Bitcoin is also portrayed as a decentralized and limited store of value, akin to digital gold. This definition has led Michael Saylor of MicroStrategy to suggest that the U.S. should sell all of its gold to purchase BTC.
From a policy perspective, several key goals are outlined in the document:
- Establish a Bitcoin reserve to boost the economy and maintain the U.S.’s financial dominance in the global market.
- Designate Bitcoin as a strategic asset held by the government to diversify national reserves and increase economic security.
- Position the U.S. as the leading country for digital assets in terms of attracting investments, talent, and innovation.
The SBR will be managed by the U.S. Department of the Treasury, with strict oversight, including audits and security measures.
Formation of the SBR and Bitcoin Acquisition
Within one month of the draft’s approval, the framework for secure storage is expected to be implemented, possibly involving partnerships with secure service providers.
Meanwhile, the U.S. Treasury Department will set stringent standards to ensure long-term security, including cryptographic verification and reducing reliance on third parties.
Regarding acquisition, the draft states that Bitcoin is well-suited as a reserve asset to be held in the Exchange Stabilization Fund (ESF), with the program set to begin within two months. The government plans to purchase $21 billion worth of Bitcoin (about Rp337.7 trillion) over one year using funds from the ESF. The purchases will be conducted under protocols designed to minimize mismanagement risks.
According to the draft, long-term preservation will be prioritized, meaning that any BTC purchased by the SBR will be locked for at least two decades to safeguard the nation’s financial strength.
Regarding Bitcoin Sales in the SBR
The documents stipulate that Bitcoin can only be sold under extraordinary circumstances (e.g., economic or security crises). Any liquidation of assets will require detailed justification and presidential approval.
The proposal also suggests that when a sale occurs, it should be conducted transparently with minimal disruption. Public reserve proof and cryptographic ownership receipts for Bitcoin will be published quarterly to promote transparency.
The U.S. Treasury Department is expected to report on the performance, security, and strategic benefits of Bitcoin within the ESF.
Coordination between various government agencies, including the Treasury Department, Federal Reserve, and Department of Defense, will also be encouraged to align with national security and economic policies.
This draft has yet to be approved or signed, but many who have reviewed it seem to believe it is a promising proposal.
States Are Thinking Along the Same Lines
Not only at the national level, but U.S. states are also considering exploring Bitcoin as a reserve asset to combat inflation as a hedge.
States like Ohio, Texas, and Pennsylvania are exploring the idea. Ohio recently released a proposal for a “Bitcoin Reserve Fund” that would allow the state to purchase Bitcoin as part of an investment strategy. Ohio House Republican leader, Derek Merrin, also introduced the Ohio Bitcoin Reserve Act (HB 703) this month.
Meanwhile, Texas and Pennsylvania are drafting legislation to create their own Bitcoin reserves.
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