The Likelihood of a U.S. Strategic Bitcoin Reserve

On December 12, 2024, following his participation in the NYSE opening bell ceremony, Donald Trump confirmed in an interview with CNBC that the U.S. should establish a cryptocurrency strategic reserve akin to strategic oil reserves.

In the early hours of December 18, 2024, a draft presidential executive order titled “Executive Order on Designating Bitcoin as a Strategic Reserve Asset within the Exchange Stabilization Fund” began circulating within the industry.

According to media reports, this executive order aims to “designate Bitcoin as a strategic reserve asset,” which can take effect immediately upon Trump’s signing on his first day in office.

Golden Finance has translated the draft executive order prepared by the Bitcoin Policy Institute, with the following details:

Executive Order on Designating Bitcoin as a Strategic Reserve Asset within the Exchange Stabilization Fund

Pursuant to the powers vested in me as President of the United States by the Constitution and laws, including Section 5302 of Title 31 of the U.S. Code, I hereby order as follows:

Section 1: Purpose

As the global financial system increasingly integrates digital assets and new economic tools, the United States must adjust its financial strategy to maintain stability and leadership in the global economy. Bitcoin, as a decentralized and limited form of value storage, akin to digital gold, has unique properties that can enhance the resilience of the U.S. dollar and support American economic interests. Therefore, this executive order designates Bitcoin as an asset suitable for strategic acquisition within the Treasury’s Exchange Stabilization Fund (ESF) and establishes a strategic Bitcoin reserve as a permanent national asset for the benefit of all American citizens.

Section 2: Policy

The policy of the United States is as follows:

Establish a strategic Bitcoin reserve to promote national economic growth and reinforce America’s long-term financial dominance.

Designate Bitcoin as a strategic asset held by the U.S. government, ensuring the diversification of assets within the Exchange Stabilization Fund to safeguard the national economic security and competitive advantages of the U.S. in the 21st century.

Attract capital, talent, and sound enterprises to build and develop, positioning the U.S. as a global leader in the digital asset industry.

Section 3: Establishment of the Strategic Bitcoin Reserve (SBR) and Designation of Bitcoin as a Strategic Reserve Asset

(a) Establishment of the Strategic Bitcoin Reserve: A Strategic Bitcoin Reserve (SBR) shall be established, managed by the Secretary of the Treasury, aimed at increasing the diversity of U.S. reserve assets. To enhance confidence in this reserve, the SBR will undergo regular audits, adhere to stringent security standards, and implement comprehensive reporting measures to ensure long-term accountability and security.

(b) Integration of Government-Held Bitcoin: Within seven days of the issuance of this order, any Bitcoin controlled by federal agencies (including the U.S. Marshals Service) shall not be sold, exchanged, auctioned, or otherwise pledged. The legal ownership of this Bitcoin shall be transferred to the Strategic Bitcoin Reserve by the heads of the federal agencies.

(c) Designation as a Reserve Asset: Bitcoin is hereby designated as a strategic reserve asset suitable for purchase and holding within the Exchange Stabilization Fund. Within 60 days of the issuance of this order, the Secretary of the Treasury shall immediately implement an acquisition plan to obtain and manage Bitcoin within the Exchange Stabilization Fund. The goal of the Strategic Bitcoin Reserve is to establish the U.S.'s undisputed leadership in this domain.

Section 4: Acquisition and Custody Agreement

(a) Acquisition Plan: Pursuant to Section 5302 of Title 31 of the U.S. Code, the Secretary of the Treasury is authorized to "engage in transactions involving credit instruments...". Therefore, the Secretary is now directly authorized, within the bounds of applicable laws, to utilize up to $21 billion from the Exchange Stabilization Fund for strategic procurement, incorporating Bitcoin into the Strategic Bitcoin Reserve by purchasing debt obligations from suitable counterparties. This initial acquisition plan must be completed within 365 days of the issuance of this order.

(b) Custody and Security Agreement: To ensure the security of Bitcoin at all stages of custody, the Secretary of the Treasury will implement a phased framework. Within 30 days of the issuance of this order, the Secretary must confirm a relationship between the U.S. government and reputable custody service providers to ensure the immediate and reliable storage of Bitcoin within the Strategic Bitcoin Reserve. Additionally, the Secretary shall instruct that all Bitcoin purchased under the acquisition plan be securely transferred to these custody service providers.

Furthermore, the Secretary must collaborate with the National Security Agency, the Cybersecurity and Infrastructure Security Agency, the National Institute of Standards and Technology (NIST), and other relevant entities to develop and implement measures to enhance long-term security, reduce reliance on third parties, and ensure complete sovereign control over the U.S. Bitcoin Reserve. These measures will include specialized hardware, reliable software, access controls, geographic distribution, multi-signature controls, and physical security measures. The Secretary shall ensure that the custody agreement for the Strategic Bitcoin Reserve complies with the auditing procedures of the Exchange Stabilization Fund, strict cybersecurity standards, and cryptographic evidence verification to safeguard both the integrity of the Strategic Bitcoin Reserve and public confidence.

Section 5: Conditions for the Sale of the Strategic Bitcoin Reserve

(a) Long-Term Preservation Principle: The Strategic Bitcoin Reserve shall serve as a permanent pillar of U.S. financial strength and commitment to the future digital economy, embodying the spirit of safeguarding the Fort Knox gold reserves. Bitcoin stored within the Strategic Bitcoin Reserve should not be viewed as a short-term financial asset; its goal is to establish U.S. leadership in global Bitcoin ownership, innovation, and management, ensuring the protection of American interests rather than those of foreign competitors, and setting standards for global digital asset strategy.

(b) Strict Liquidity Restrictions: The sale or other forms of liquidation of the Strategic Bitcoin Reserve are only permitted in extreme national economic or security crises and require the approval of the President of the United States. The Secretary of the Treasury shall not sell, pledge, exchange, or otherwise dispose of any part of the Strategic Bitcoin Reserve without explicit authorization.

(c) Strict Approval Procedures: Before any sale is conducted, the Secretary of the Treasury must submit a detailed written decision and provide sufficient evidence demonstrating that the proposed sale directly addresses a specific national economic or security crisis.

(d) Transparent and Controlled Execution: In rare cases where a sale is approved, it should be conducted in the most fair and stringent manner possible to minimize market impact and maintain public confidence. Private transactions, staggered trades, or other measures should be prioritized to ensure that even during a crisis, the nation's reputation for financial prudence and accountability is upheld.

Section 6: Reporting and Transparency

(a) Public Proof of Reserves: The Secretary of the Treasury shall implement a public reserve proof process utilizing cryptographic authentication. These audits should occur quarterly to ensure transparency regarding the Bitcoin holdings of the Exchange Stabilization Fund while protecting sensitive information.

(b) Annual Reporting: As part of the annual report on the operations of the Exchange Stabilization Fund (as required by the Gold Reserve Act), the Secretary of the Treasury must provide detailed information on the status, performance, and strategic benefits of Bitcoin within the Exchange Stabilization Fund. This report should also summarize acquisition strategies, custody security measures, and any impact on economic stability (considering national economic or security factors).

Section 7: Inter-Agency Coordination

The Secretary of the Treasury shall coordinate with the Federal Reserve Board, the Department of Defense, and other relevant federal agencies to ensure that the acquisition and management of Bitcoin within the Exchange Stabilization Fund align with U.S. national security, economic stability, and cybersecurity standards.

In witness whereof, I have signed this document on [year][month][date], in the [year] year of American independence and the [year] year of the founding of the United States.

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