US Government Eyes Major Bitcoin Play: Bill Proposes 1 Million BTC Purchase for New Strategic Reserve Over 5 Years

Okay, let's break down this proposed "BITCOIN Act of 2025." In simple terms, this bill directs the U.S. government to create a national stash of Bitcoin, called the "Strategic Bitcoin Reserve." The plan involves the Treasury Secretary buying 200,000 Bitcoins each year for five years, aiming for a total of 1 million Bitcoins, while also requiring all federal agencies to transfer any Bitcoin they currently hold into this new central reserve.

Building the Digital Fort Knox

Think of the Strategic Bitcoin Reserve (Sec. 4) as a network of super-secure, offline storage facilities scattered across the country – what the crypto world calls "cold storage." The goal is to keep the government's Bitcoin safe from hackers and physical threats. This isn't just about future purchases; the bill mandates that all Bitcoin currently held by any federal agency gets moved into this reserve (Sec. 7). It also lays out rules for handling things like "forks" (when a cryptocurrency splits) and "airdrops" (free token distributions), generally requiring these extra assets to be held for five years before deciding whether to keep or sell them.

The Big Buy: 1 Million Bitcoin, 20-Year Hold

The core of the plan is the Bitcoin Purchase Program (Sec. 5). The Treasury is tasked with buying 1 million Bitcoins over five years, doing so carefully to avoid causing wild price swings. Here’s the kicker: any Bitcoin acquired under this program, or transferred from agencies, must be held in the Reserve for at least 20 years. No selling, swapping, or spending it during that time. Only after 18 years would the Treasury Secretary recommend to Congress whether to keep holding it or start slowly selling (no more than 10% every two years) potentially to pay down national debt. The government could end up holding more than 1 million BTC if it acquires coins through other means like asset forfeiture, and those would also be subject to the 20-year hold.

Show Me the Money (and the Bitcoin)

So, how would this massive purchase be funded? Section 9 points to a couple of sources. First, it proposes tapping into Federal Reserve banks' net earnings that are sent to the Treasury, potentially using up to $6 billion per year from 2025 to 2029, if the Fed actually sends earnings those years. Second, it involves a complex maneuver with the government's gold reserves: Federal Reserve banks would turn in their existing gold certificates, Treasury would issue new ones based on current gold market value, and the cash difference would go towards funding the Bitcoin buys first, with any leftover potentially used for debt reduction. To keep things transparent, the bill requires a "Proof of Reserve" system (Sec. 6), meaning quarterly public reports on the Bitcoin holdings, independent audits, and oversight from the Government Accountability Office (GAO).

What About Your Bitcoin? (And the States')

If you hold Bitcoin personally, this bill explicitly states it doesn't give the government power to seize lawfully acquired private crypto (Sec. 10). It affirms rights to buy, hold, sell, and self-custody Bitcoin. For state governments holding Bitcoin, the bill offers a voluntary program (Sec. 8) allowing them to store their assets in the federal Strategic Bitcoin Reserve, though they retain ownership and assume the risks. Finally, the bill also officially adds Bitcoin to the list of assets the Treasury can hold and trade within the existing Exchange Stabilization Fund (Sec. 11), a powerful fund used to stabilize currency markets.