Can the U.S. “Bitcoin Strategic Reserve” be implemented in 2025? These points in time deserve attention

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Since Trump's "decisive" victory in the presidential election in early November, the cryptocurrency market, especially Bit, has entered a period of strong "US Bit Strategic Reserve" expectations. Clearly, the market will focus heavily on the implementation of this promise after Trump takes office in 2025, and some analysts have said that this event will break the Bit bull-bear cycle, meaning that any "incident" in the future could lead to violent market fluctuations.

What we can do now is to pay attention to its progress, estimate the possible implementation timeline in advance, and make corresponding preparations.

01、Latest Developments

The "Bit Strategic Reserve" proposal had actually been discussed before the US presidential election, with Senator Cynthia Lummis proposing the "BITCOIN Act of 2024" as early as July 31, 2024, which called for the annual purchase of 200,000 Bit, reaching 1 million Bit in five years.

Subsequently, during the campaign, Trump promised to become the "Cryptocurrency President" in a speech at a Bit conference in the industry, and the industry hopes that he will fulfill this promise by issuing an executive order to establish a Bit reserve, ensure that the industry can access banking services, and establish a Cryptocurrency Commission.

On December 17, 2024, the Bitcoin Policy Institute (BPI) (note that it is a non-profit organization focused on Bit policy research, not an official organization, but it is still an important think tank for policymakers on Bit-related issues) recently released a draft executive order, attempting to provide reference opinions for the framework of Trump's "Bit Strategic Reserve" executive order.

This draft clearly proposes: Suggest using 1%-5% of the national debt assets to purchase Bit to form a long-term reserve. Led by the Treasury Department, with the Federal Reserve collaborating, to gradually build up the reserve.

On December 19, 2024, Federal Reserve Chairman Powell (expected to continue his term after Trump takes office) expressed a cautious view at a news conference, stating that the Federal Reserve has no intention of participating in any government plan to stockpile Bit, as such issues fall within the purview of Congress, and the Federal Reserve has not sought to change existing laws to allow for the holding of Bit.

From the latest situation, although the Federal Reserve Chairman holds a conservative view, with the crypto-friendly US Treasury Secretary nominated by Trump and the swift issuance of a "Presidential Executive Order" after taking office, these will not affect the Trump team's continued efforts to incorporate Bit into the US strategic reserve.

Further reading: What impact would Trump declaring Bit a strategic reserve asset have?

02、Fastest Implementation Timeline

Given that the "Bit Strategic Reserve" is not a small issue and cannot be immediately implemented by the US President alone, we will not see its immediate implementation. Based on the current administrative order or legislative process in the country, if Trump wants to implement the Bit strategic reserve, after taking office, he will immediately have the Cryptocurrency Commission conduct policy research and feasibility assessments, and then formally propose a plan, which can then be carried out through two paths:

Path One: Presidential Executive Order (as early as the second half of 2025)

Trump issuing an executive order after taking office is the fastest path, as it can bypass the conservative and opposing forces from the Federal Reserve and Congress, and is based on the draft provided by the "Bitcoin Policy Institute", instructing the US Treasury Department to directly allocate Bit using the Exchange Stabilization Fund (ESF).

However, this method, although fast and convenient, also has side effects. The Treasury Department's Exchange Stabilization Fund can be allocated without Congressional approval, but it can also be investigated by Congress and legislatively restricted. Executive orders can also be overturned and modified by the next president, so their sustainability and stability are not as good as legislation.

Path Two: Congressional Legislation (as early as the second half of 2026)

If a more stable legislative path is taken, a longer process is required. After the Cryptocurrency Commission conducts policy research and feasibility assessments, the bill needs to be submitted to Congress and reviewed by the Senate Banking Committee, then passed by the Senate, House of Representatives, and signed by the President before it can be officially enacted.

This process may involve various back-and-forth struggles and is relatively complex, as many conservative lawmakers will certainly raise objections and obstruct it. Therefore, while this path can result in a lasting and stable law, it will take a long time, at least until the second half of 2026 or 2027 before it can be implemented.

Recent information indicates that the cryptocurrency industry is pushing Trump's team to issue an executive order on his first day in office next month, to launch the cryptocurrency policy reforms he has promised, and help promote the mainstream adoption of cryptocurrencies. If an executive order is issued, the Bit strategic reserve may be implemented as early as the middle of 2025.

03、Several Important Milestones

During the process of the relevant executive order or legislation for the Bit strategic reserve, the following milestones may have a significant impact on the market:

1) January 20, 2025, around Trump's inauguration

Trump will be officially inaugurated on this day, and from this point on, Trump will be able to officially "issue orders". This time point will mark the beginning of the new president's administration, and related policy trends may gradually emerge. The market will pay close attention to the inaugural address and the release of early executive orders. Many guests are expected to attend Trump's inauguration ceremony, and the financial market will also pay close attention.

2) By mid-2025, the policy research stage will be completed

According to the timeline, the crypto committee's policy research is expected to be completed and a feasibility report and draft on Bitcoin reserves will be proposed by the first half or middle of 2025. Subsequently, Trump can sign an executive order. This will mark the official launch of the "Bitcoin Strategic Reserve".

3) From the second half of 2025 to the beginning of 2026, implementation details and potential congressional tug-of-war

After signing the relevant executive order and finalizing the framework, the U.S. Department of the Treasury, the Federal Reserve, and other relevant departments will begin to formulate specific implementation details, including the method of Bitcoin procurement, reserve ratio, and asset management rules, and then begin formal implementation.

During this period, it should not be too smooth, as opposing members of Congress will join the obstructionist ranks and repeatedly tug-of-war.

Finally, if everything goes well and the Bitcoin reserve strategy brings objective "benefits", future legislation may be further promoted, which will have a profound impact on the crypto market landscape.

04. Conclusion

The road to the "Bitcoin Strategic Reserve" is full of twists and turns, and it is not something that can be implemented in a day or two, but at least half a year later. However, regardless of how it goes, Trump's "U.S. Bitcoin Strategic Reserve" has brought good expectations, and has also "set a template" to drive central banks, financial institutions, and listed companies to research and explore the feasibility of Bitcoin reserves.

Although the policy details and the final implementation time may still be subject to many uncertainties, we still need to follow up and pay attention to the key time nodes, and make timely adjustments.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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