Proposal to Establish a Strategic Bitcoin Reserve in the US
Recently, Dennis Porter, founder of the Satoshi Action Fund, presented a draft executive order designed for President-elect Donald Trump. The order proposes the creation of a Strategic Bitcoin Reserve within the Exchange Stabilization Fund (ESF).
Key Points of the Draft Executive Order
- The order suggests allocating up to 2% of the ESF’s total portfolio value for a pilot period of 18 months.
- Bitcoin would be used as the foundation for the Reserve.
- Bitcoin integration aims to stabilize the US dollar and respond to macroeconomic shocks.
Draft Recommendations
The draft outlines several key recommendations:
Treasury Authorization
- The US Treasury would be authorized to acquire, hold, and manage Bitcoin within the ESF portfolio.
- Bitcoin would be treated similarly to foreign reserves like gold or foreign currencies.
Custody Systems Development
- The Treasury would establish a working group to develop secure custody systems for Bitcoin holdings.
- Existing custody infrastructure, such as systems used by the US Marshals Service, would be leveraged.
Oversight Mechanisms
- Semiannual reports detailing Bitcoin transactions, holdings, and risk management strategies would be issued to Congress and the President.
- The Treasury Inspector General and the Government Accountability Office would conduct regular audits for transparency.
Future Legislation and Recommendations
The draft acknowledges the temporary nature of using the ESF for Bitcoin reserves and proposes the following:
Comprehensive Report
- Within 24 months, the Treasury would deliver a report to Congress outlining limitations and benefits of using the ESF for Bitcoin custody.
- Alternative frameworks for reserve management and legislative recommendations would be included.
Preserving Federal Reserve Independence
- The proposal ensures that creating a Bitcoin reserve would not interfere with the Federal Reserve’s independence in monetary policy.
- It aims to hedge against macroeconomic risks and position the US as a leader in financial innovation.
If enacted, this proposal would represent a significant government-led embrace of Bitcoin, with far-reaching implications for the digital asset industry and global reserve practices.
