Draft Executive Order for a Strategic Bitcoin Reserve
Introduction
Dennis Porter, founder of the Satoshi Action Fund, has unveiled a draft of an executive order crafted for President-elect Donald Trump to establish a Strategic Bitcoin (BTC) Reserve within the Exchange Stabilization Fund (ESF).
The order allows for an initial allocation of up to 2% of the ESF’s total portfolio value over an 18-month pilot period. Furthermore, it would use BTC in the US government custody as the foundation for the Reserve.
Key Provisions
The draft executive order sets out a roadmap for incorporating Bitcoin into the ESF, a fund traditionally used to stabilize the US dollar and respond to macroeconomic shocks. It also outlines a framework for integrating Bitcoin as a foreign-currency-like reserve asset while ending the auction of confiscated Bitcoin held by US authorities.
Among its primary provisions is the US Treasury would be authorized to acquire, hold, and manage Bitcoin as part of the ESF portfolio. Additionally, Bitcoin would be treated similarly to foreign reserves like gold or foreign currencies.
The draft suggests that the Treasury establish a working group to develop custody systems to ensure the secure management of Bitcoin holdings. This includes evaluating solutions that provide the Treasury with direct access to reserves and leveraging existing custody infrastructure, such as systems currently employed by the US Marshals Service (USMS).
The proposal would discontinue the auction of forfeited Bitcoin by the USMS. Instead, approximately 200,000 BTC currently in US custody — valued at $20.6 billion at $103,000 per Bitcoin — would serve as the initial foundation of the Strategic Bitcoin Reserve.
Oversight and Transparency
The draft also includes robust oversight mechanisms to balance innovation with accountability. The Treasury would issue semiannual reports detailing Bitcoin transactions, holdings, and risk management strategies to Congress and the President.
Additionally, the Treasury Inspector General and the Government Accountability Office (GAO) would conduct regular audits, with annual public summaries to ensure transparency.
Legislative Recommendations
Within 24 months, the Treasury would be required to deliver a comprehensive report to Congress outlining the limitations and benefits of using the ESF as a Bitcoin custodian, alternative frameworks for reserve management, and legislative recommendations to enshrine the Strategic Bitcoin Reserve into US federal law.
The proposal emphasizes that creating a Bitcoin reserve would not interfere with the Federal Reserve’s independence in setting monetary policy. This provision addresses concerns that Bitcoin integration could complicate traditional monetary frameworks or undermine confidence in the US dollar.
Conclusion
If the draft is enacted, it would mark the largest government-led embrace of Bitcoin to date, with profound implications for the digital asset industry, US economic policy, and global reserve practices.
FAQs
Q: What is the Strategic Bitcoin Reserve?
A: The Strategic Bitcoin Reserve is a proposed reserve of Bitcoin held by the US government, with the goal of stabilizing the US dollar and responding to macroeconomic shocks.
Q: How would the reserve be managed?
A: The US Treasury would be authorized to acquire, hold, and manage Bitcoin as part of the ESF portfolio, with a working group established to develop custody systems and ensure the secure management of Bitcoin holdings.
Q: What is the initial allocation of the reserve?
A: The initial allocation would be up to 2% of the ESF’s total portfolio value over an 18-month pilot period, with approximately 200,000 BTC currently in US custody serving as the initial foundation of the reserve.
Q: How would the reserve be overseen?
A: The Treasury would issue semiannual reports detailing Bitcoin transactions, holdings, and risk management strategies to Congress and the President, with regular audits conducted by the Treasury Inspector General and the Government Accountability Office (GAO) to ensure transparency.
Q: What are the implications of the reserve?
A: The reserve would have profound implications for the digital asset industry, US economic policy, and global reserve practices, potentially marking the largest government-led embrace of Bitcoin to date.
