At the intersection of the cryptocurrency and traditional finance worlds, a new legislative proposal is sparking widespread discussion. This draft bill, titled the "2025 Bitcoin Strategic Reserve Act," was drafted by the Bitcoin advocacy organization Satoshi Action Fund, with the aim of incorporating Bitcoin as a strategic reserve tool into the fiscal systems of U.S. states. This is not only an unprecedented attempt, but also a bold step in the face of increasing global economic uncertainty, to combat inflation and strengthen financial resilience.
I. Bitcoin: The New "Gold" for State Governments?
With the inauguration of Trump, Aiying's previous article introducing the "American Bitcoin Strategic Reserve Act": purchasing 200,000 bitcoins per year, reaching 1 million within five years, is now one step closer to practical implementation, and has even proposed the "2025 Bitcoin Strategic Reserve Act," with the goal of authorizing state financial officials to include Bitcoin in fiscal reserves to defend against asset devaluation caused by inflation.
In the first part of the draft, lawmakers clearly state that inflation has severely eroded the purchasing power of state finances and retirement funds, affecting the economic well-being of residents. While state governments cannot control the federal money supply and macroeconomic policies, they have a responsibility to protect the financial health of the state. Therefore, Bitcoin, as an anti-inflationary asset, has been put on the agenda. Data shows that Bitcoin's market capitalization has skyrocketed in the past 16 years, now exceeding $1 trillion, which undoubtedly proves its potential in combating inflation.
II. Flexibility and Innovation: What is the Intent of the New Legislation?
In the draft, state governments plan to enact legislation to allow Bitcoin and other digital assets to be included in the investment portfolios of state finances as a means of addressing inflation and economic uncertainty. The core objectives of the legislation are:
To protect the purchasing power of state finances and prevent asset devaluation due to inflation.
To quickly respond to market changes and increase returns through flexible investment policies.
To ensure that the investment strategy is in line with the goal of enhancing the economic security and financial resilience of the state.
The bill particularly emphasizes flexibility. In the context of an increasingly complex and volatile global economy, traditional investment models often appear too rigid, while the introduction of digital assets such as Bitcoin provides more diverse options for investment portfolios, allowing state governments to better manage market risks.
III. Secure Custody: Safeguard Measures for Digital Assets
In terms of holding and managing digital assets, the draft sets strict requirements for security. Specifically, the custody of Bitcoin includes three options: direct holding by the state treasury, holding through a qualified custodian, or holding through a registered exchange-traded product (ETP). At the same time, to ensure the security of digital assets, the draft proposes a "secure custody solution" - requiring private keys to be controlled solely by the government and stored in an encrypted environment, with measures such as geographically dispersed data centers and multi-party governance structures to ensure the security of the assets. This is aimed at addressing public concerns about the security of digital assets and ensuring the security and stability of digital assets in custody and management.
Specifically, the "secure custody solution" includes the following measures:
Exclusive control of private keys: Encryption private keys must be held by government entities and can only be accessed in an end-to-end encrypted environment.
Geographically dispersed data centers: The hardware devices containing the private keys must be stored in at least two geographically dispersed secure data centers to mitigate the risk of a single point of failure.
Multi-party governance structure: Authorization for each transaction must go through a multi-party governance structure to ensure that all transactions are subject to strict approval and recording.
Disaster recovery mechanism: The custodian service provider must have a comprehensive disaster recovery mechanism to ensure that the state government can still access and manage the assets if the provider is unable to perform its duties.
Periodic code audits: The custody solution must undergo periodic code audits and penetration testing by audit firms, and any vulnerabilities found must be promptly fixed.
IV. Bitcoin Taxation: A New Source of Funding for Public Services?
The fifth part of the bill addresses the payment method for taxes and fees. According to the draft, Bitcoin payments for taxes and fees will be transferred to the state's general fund, and the state fund will compensate the corresponding digital asset account in U.S. dollars. This arrangement not only ensures the flexible use of funds, but also means that the acceptance of Bitcoin at the state level has been significantly improved.
Specifically, the process of paying taxes in Bitcoin is as follows:
Tax payment: Taxpayers can use Bitcoin to pay taxes, and these Bitcoins will first enter the state's general fund account.
Fund conversion: The state's general fund will compensate the designated digital asset account with an equivalent amount in U.S. dollars to ensure financial balance.
Transparent management: Through blockchain technology, the inflow and outflow of Bitcoin is made publicly transparent, reducing the risk of corruption and misuse of funds.
In addition, the draft also allows state retirement funds to invest in registered digital asset exchange-traded products, further diversifying investment channels. These measures indicate that Bitcoin not only serves as a tool against inflation, but may also become part of the funding source for public services, gradually integrating into people's daily lives.
V. Behind the Legislation: An Experiment in Financial Innovation
The "2025 Bitcoin Strategic Reserve Act" is undoubtedly an unprecedented attempt and a microcosm of the modernization of the financial system. With Pennsylvania passing the "Bitcoin Rights" Act, the introduction of this strategic reserve bill seems logical and far-reaching. As an advocate of Bitcoin, the Satoshi Action Fund is trying to promote the application of Bitcoin in a wider range of fields through such legislation, providing lawmakers with a perspective on understanding blockchain technology and helping them seize the opportunities of the digital age in the policy-making process.
Aiying FundInsight is also closely following such legislative trends and is committed to helping Web3 and traditional financial institutions find the best compliance management path in this policy context. We believe that the high volatility and risk characteristics of Bitcoin are challenges that lawmakers must face, but through a reasonable compliance framework and effective management tools, these risks can be minimized. We assist various financial entities in building reasonable fund structures, supporting their fund launch and fundraising activities from the perspectives of compliance and operational convenience, to ensure stable development in the ever-changing market environment.
To address these challenges, the draft proposes some risk control measures:
Investment cap: The state treasury's investment in Bitcoin shall not exceed 10% of the total amount of the relevant fund, to prevent over-reliance on a single asset.
Asset lending: The state treasury can lend Bitcoin to generate additional returns, but must follow the rules set by the state financial officials, without increasing financial risk.
Diversified investment strategy: Encouraging state governments to continue investing in other traditional financial assets while introducing Bitcoin, to ensure the overall stability of the investment portfolio.
Whether this proposal will be widely accepted and implemented remains to be discussed and evaluated by state governments and the public. But it is undeniable that the idea is worth learning from. 'TRON' must be translated into 'TRON'. 'HT' must be translated into 'HT'. 'RON' must be translated into 'RON'. 'ONG' must be translated into 'ONG'.
In summary, the "Bitcoin Strategic Reserve Act of 2025" is full of ambition and aspiration, attempting to enhance the resilience and flexibility of public funds by incorporating the emerging digital asset of Bitcoin into the state fiscal system. Behind the legislation, there is an urgent need to promote financial modernization, as well as a cautious prevention of emerging risks. Whether this experiment will succeed and provide a new paradigm for future government investment and financial innovation remains to be seen. Aiying FundInsight will continue to support Web3 and traditional financial institutions, helping them navigate this unprecedented era of transformation and innovation. The draft link: https://www.satoshiaction.io/sbr
