New BITCOIN Act Mandates Buying 1 Million BTC, Locking It Up for 20 Years, and Changing How the Fed Pays the Treasury

The new Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2025—or the BITCOIN Act—is exactly what it sounds like: a massive government move to officially integrate Bitcoin into the nation’s financial strategy. This bill mandates the Secretary of the Treasury to create a Strategic Bitcoin Reserve and purchase 1,000,000 Bitcoins over five years, locking them away in cold storage for a minimum of 20 years.

This isn't about letting the government trade crypto; it's about making Bitcoin a national asset. The goal is to diversify U.S. reserves and potentially strengthen the dollar by holding a decentralized, fixed-supply asset. Every Bitcoin purchased goes into a secure, geographically diverse network of storage facilities, and every federal agency, from the U.S. Marshal Service to the FBI, must transfer any Bitcoin they seize or hold into this new Reserve (SEC. 7).

The Million-Coin Lockup and the 20-Year Wait

The biggest commitment here is the sheer scale and timeline. The Treasury must acquire 200,000 BTC annually for five years (SEC. 5). Once acquired, that Bitcoin cannot be sold, traded, or auctioned for at least two decades. This 20-year lockup is designed to stabilize the Reserve, but it also means the government loses all flexibility to use this asset to respond to economic crises or market changes for a very long time. For taxpayers, this is a massive, multi-billion dollar bet on the long-term value of a volatile asset, tied up for a generation. If the value tanks, we can't cut our losses.

If the government receives other digital assets through a "fork" (a split in the network) or an "airdrop" (free distribution), those assets must also be held for five years before the Secretary can decide which ones to keep and which to sell off into the Treasury’s general fund (SEC. 4).

How We’re Paying for the Bitcoin Reserve

This huge purchase program has to be funded, and the bill finds the money by changing how the Federal Reserve operates. Right now, the Fed sends a significant portion of its surplus earnings back to the Treasury. This bill cuts that required payment from over $6.8 billion down to $2.4 billion (SEC. 9). More importantly, for fiscal years 2025 through 2029, the first $6 billion of any net earnings the Fed sends to the Treasury must be earmarked specifically for buying Bitcoin.

Another major funding source comes from a wonky but crucial change: the Treasury must issue new gold certificates to the Federal Reserve banks, reflecting the gold's current fair market value. The cash difference between the old and new certificate values—which could be substantial—must be sent to the Treasury and used to fully fund the Bitcoin Purchase Program before any of the Fed's regular earnings are used (SEC. 9). This means the cost of buying this national Bitcoin reserve is being directly front-loaded through a restructuring of the nation's reserve accounting.

Public Proof and Private Protection

On the accountability front, the bill is surprisingly strong. It mandates a Proof of Reserve System (SEC. 6). Every three months, the Treasury must publish a report including a public cryptographic attestation proving they actually control the private keys for the Bitcoin they claim to hold. This is a huge win for transparency, as it requires the government to prove its holdings using the same cryptographic tools used by the industry, subject to checks by an independent, third-party auditor.

Crucially, the bill also offers explicit protection for you, the individual. Section 10 states clearly that nothing in the Act allows the Federal Government to take, confiscate, or harm the property rights you have in your own Bitcoin. It confirms your right to buy, hold, and sell Bitcoin, and, most importantly, confirms that your right to self-custody—holding your own private keys—is protected. For anyone who worries about government overreach into digital assets, this section is a major reassurance.

Finally, states can voluntarily store their own Bitcoin in segregated accounts within the federal Reserve (SEC. 8). However, the federal government explicitly disclaims liability if the state’s Bitcoin is lost or stolen, unless the loss is due to the gross negligence of the Reserve managers. States looking to use this secure storage option need to be fully aware that they are accepting the risk of loss.