US Strategic Bitcoin Reserve Moves to Address National Debt

Estimated reading time: 4 minutes

• The U.S. government has announced the creation of a Strategic Bitcoin Reserve (SBR) to manage the national debt.
• The initiative was authorized by President Donald Trump through an executive order and aligns with the proposed “BITCOIN Act of 2025.”
• The government currently holds about 213,297 Bitcoins and plans to expand this to 1 million Bitcoins to bolster economic stability.
• Economic pressures are driving this proposal as the national debt continues to soar above $36.9 trillion.
• Debates are underway regarding the potential impacts of the SBR on markets, the dollar’s status, and international relations.

The United States government has announced plans to establish a Strategic Bitcoin Reserve (SBR) as part of an effort to address the growing national debt. Officials have proposed integrating Bitcoin holdings into fiscal strategy, reflecting an increased federal focus on digital assets amid ongoing economic challenges.

President Donald Trump authorized the initiative in March through an executive order. This order supports the “BITCOIN Act of 2025,” currently under consideration as Senate Bill 954 in Congress. The proposed legislation would formalize the creation of a U.S. Bitcoin reserve, outline management procedures, and set up oversight for federal cryptocurrency assets[1].[2] In conjunction with this order, President Trump put together a special task force to examine the structure and implementation of a digital reserve, signaling the administration’s interest in digital asset infrastructure[2].

The government currently holds approximately 213,297 Bitcoins, making up about 1% of the global Bitcoin supply. Most of these holdings come from law enforcement seizures. Previously, there were no legal pathways to use this Bitcoin as part of broader fiscal policy[4]. A new proposal introduced by Senator Cynthia Lummis on June 6 aims to expand the reserve to 1 million Bitcoins. This measure is intended to help reduce national debt and increase economic security if enacted[5].

Economic pressures underlie the development of the SBR. As of 2025, the U.S. spends more each year on interest payments for the national debt than on national defense[6]. Credit rating agencies have downgraded U.S. debt from AAA to AA+, reflecting concerns about fiscal stability and growing government obligations[7]. As a result, the government faces higher borrowing costs and increased scrutiny from global investors[8].

The timing of these actions coincides with changes in the cryptocurrency market. Bitcoin’s price stabilized above $100,000 in June 2025, surpassing its previous high of $69,000 in 2021[9]. This growth has drawn more institutional participants and influenced lawmakers to consider Bitcoin as a possible tool for managing fiscal risk.

Meanwhile, the national debt has risen above $36.9 trillion. The U.S. dollar continues to represent 58% of worldwide foreign exchange reserves, but questions about its future remain[10].[11] Some industry leaders, including Coinbase CEO Brian Armstrong, have noted that failing to address budget deficits could threaten the dollar’s status, with Bitcoin potentially emerging as an alternative reserve[12]. Projections indicate annual interest payments on the debt could exceed $1 trillion, prompting some policymakers to consider digital assets as potential hedges[13].

The proposal for a Strategic Bitcoin Reserve has prompted debate about its potential effects on markets, international responses, and long-term stability for the dollar. As legislative and executive efforts continue, the federal government is moving toward active participation in cryptocurrency policy as a part of its broader financial strategy.

---

1. Finextra, March 2025, “Towards US Strategic Bitcoin Reserve: First Reactions and Mixed Feelings,” https://www.finextra.com/blogposting/28564/towards-us-strategic-bitcoin-reserve-first-reactions-and-mixed-feelings
2. UCSD Guardian, Feb 3, 2025, “Strategic Bitcoin Reserve: The National Debt Solution for Trump,” https://ucsdguardian.org/2025/02/03/strategic-bitcoin-reserve-the-national-debt-solution-for-trump/
3. U.S. Congress, March 11, 2025, “S.954 – BITCOIN Act of 2025,” https://www.congress.gov/bill/119th-congress/senate-bill/954/text
4. UCSD Guardian, Feb 3, 2025, “Strategic Bitcoin Reserve: The National Debt Solution for Trump,” https://ucsdguardian.org/2025/02/03/strategic-bitcoin-reserve-the-national-debt-solution-for-trump/
5. The Currency Analytics, June 6, 2025, “Senator Lummis Proposes 1 Million Bitcoin Reserve for National Debt Reduction,” https://thecurrencyanalytics.com/bitcoin/senator-lummis-proposes-1-million-bitcoin-reserve-for-national-debt-reduction-179209
6. UCSD Guardian, Feb 3, 2025, “Strategic Bitcoin Reserve: The National Debt Solution for Trump,” https://ucsdguardian.org/2025/02/03/strategic-bitcoin-reserve-the-national-debt-solution-for-trump/
7. UCSD Guardian, Feb 3, 2025, “Strategic Bitcoin Reserve: The National Debt Solution for Trump,” https://ucsdguardian.org/2025/02/03/strategic-bitcoin-reserve-the-national-debt-solution-for-trump/
8. UCSD Guardian, Feb 3, 2025, “Strategic Bitcoin Reserve: The National Debt Solution for Trump,” https://ucsdguardian.org/2025/02/03/strategic-bitcoin-reserve-the-national-debt-solution-for-trump/
9. AInvest, June 2025, “National Debt Surge Sparks Bitcoin Reserve Currency Debate,” https://www.ainvest.com/news/national-debt-surge-sparks-bitcoin-reserve-currency-debate-2506/
10. AInvest, June 2025, “National Debt Surge Sparks Bitcoin Reserve Currency Debate,” https://www.ainvest.com/news/national-debt-surge-sparks-bitcoin-reserve-currency-debate-2506/
11. AInvest, June 2025, “National Debt Surge Sparks Bitcoin Reserve Currency Debate,” https://www.ainvest.com/news/national-debt-surge-sparks-bitcoin-reserve-currency-debate-2506/
12. AInvest, June 2025, “National Debt Surge Sparks Bitcoin Reserve Currency Debate,” https://www.ainvest.com/news/national-debt-surge-sparks-bitcoin-reserve-currency-debate-2506/
13. AInvest, June 2025, “National Debt Surge Sparks Bitcoin Reserve Currency Debate,” https://www.ainvest.com/news/national-debt-surge-sparks-bitcoin-reserve-currency-debate-2506/