The House Financial Services Committee has advanced legislation that would place a U.S. strategic Bitcoin reserve into federal law, moving President Donald Trump’s 2025 plan for long-term government Bitcoin holdings closer to a full congressional vote.
The American Reserve Modernization Act, approved by the committee on Wednesday, directs the Treasury Department to operate a secure Bitcoin storage facility and maintain a reserve of the cryptocurrency. The 19-page proposal would also create a separate federal stockpile for other digital assets.
The committee vote is an early but consequential procedural step. The measure must still pass the full House and the Senate before it can reach Trump’s desk, while a related Senate proposal remains pending. Congressional approval would give a statutory foundation to a reserve framework that Trump first established through an executive order, making it harder for a future administration to unwind or sell the holdings without legislative action.
Treasury would hold Bitcoin for two decades
The bill directs the Treasury to retain Bitcoin in the reserve for at least 20 years, barring sales during that period. Its structure centers on Bitcoin already controlled by the federal government, much of it obtained through criminal and civil forfeiture cases, rather than an immediate taxpayer-funded purchase program.
Trump’s 2025 executive order similarly called for the government to retain forfeited Bitcoin while instructing the Treasury and Commerce departments to identify “budget-neutral” methods of acquiring additional Bitcoin. The House legislation would turn that approach into a legal mandate and add detailed custody requirements.
The proposal traces back to legislation introduced more than a year ago by Representative Nick Begich and Senator Cynthia Lummis. Their earlier version carried the lengthy name Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act, known as the BITCOIN Act.
Under the House measure, Treasury would be instructed to pursue additional Bitcoin acquisitions over five years through budget-neutral strategies. The wording leaves Treasury with room to design methods that do not require new appropriations, though it does not establish a defined purchase schedule or a fixed amount of Bitcoin to be acquired.
That ambiguity is likely to remain central to the political debate. Bloomberg reported in July that questions had been raised over whether Treasury already has the legal authority to manage a Bitcoin reserve. Passage of the bill would address that question by explicitly assigning the department a custody and reserve-management role.
Forfeited holdings form the reserve’s starting point
The U.S. government is already one of the largest known holders of Bitcoin because federal agencies have seized cryptocurrency in cases involving online fraud, money laundering, sanctions violations, darknet activity and other alleged crimes.
The supplied legislation estimates federal agencies control 328,372 Bitcoin, valued at roughly $25 billion at the price level cited in the measure’s discussion. The total can change as agencies win or lose forfeiture cases, transfer assets between wallets, or dispose of holdings under existing legal procedures.
A formal reserve could alter the treatment of those seized coins. Rather than routinely selling Bitcoin after forfeiture proceedings conclude, Treasury would be expected to place qualifying holdings into long-term custody. That would reduce the prospect of large government sales entering the market under the framework proposed by the bill.
Past government disposals have periodically drawn attention from traders because auctions and large wallet movements can create expectations of additional supply. The bill does not guarantee that all federal Bitcoin would be permanently removed from circulation, but its 20-year holding requirement would place a substantial portion of eligible holdings outside the normal asset-disposal process.
The proposal also requires Treasury to create a digital asset stockpile for cryptocurrencies other than Bitcoin. Trump’s executive order had drawn the same distinction, treating Bitcoin as a separate reserve asset while grouping other forfeited tokens into a broader stockpile. That design gives Bitcoin a more durable policy status than other digital assets held by federal agencies.
Custody rules and audits would shape implementation
The legislation’s emphasis on a “secure Bitcoin storage facility” reflects the practical challenge of holding a large sovereign cryptocurrency balance. Federal custody would require strict controls over private keys, access permissions, wallet management and transaction approvals.
The bill includes audit requirements intended to verify that reserve assets remain under government control. It also bars federal officials from taking privately held digital asset wallets simply to add assets to the reserve, according to the draft text. Seizures would therefore remain tied to existing legal processes rather than becoming a mechanism for gathering Bitcoin for the national balance sheet.
Those restrictions are likely to matter as much as the acquisition language. A federal reserve based mainly on criminal and civil forfeitures operates within established law-enforcement channels; a program that reached into private wallets without a judicial basis would face immediate constitutional and political challenges.
Tax provision targets rapid loss harvesting
Beyond the reserve plan, the legislation contains a tax provision that would apply wash-sale rules to digital assets. Wash-sale restrictions generally prevent taxpayers from claiming a capital loss when they sell an asset and quickly repurchase the same or a substantially identical asset.
Digital assets have historically been treated differently from securities for this purpose, allowing traders to sell a token at a loss, realize the tax loss, and immediately buy it back to preserve their market exposure. The proposed change would close that practice for cryptocurrency transactions.
The tax provision could affect active traders more directly than the reserve’s custody rules. If enacted, it would require more careful timing of loss realization and repurchases, particularly near year-end when tax-loss harvesting typically increases.
Opposition focuses on Bitcoin’s price risk
The committee’s action did not come without resistance. Representative Bill Foster opposed the measure during the session, citing Bitcoin’s volatility and the risks of placing a fluctuating digital asset on the federal balance sheet.
That criticism points to the reserve’s central policy trade-off. Supporters argue that holding confiscated Bitcoin avoids selling an asset that could appreciate over time and gives the United States a strategic position in a scarce digital commodity. Opponents see a government reserve as an endorsement of an asset whose price can move sharply and whose role in national financial policy remains unsettled.
The House committee vote gives the proposal legislative momentum, but it does not yet change how Treasury manages federal Bitcoin. The Senate’s treatment of its companion bill, and the willingness of House leadership to schedule a full vote, will determine whether Trump’s executive-order framework becomes a permanent federal reserve policy.
Curious what a long-term U.S. Bitcoin reserve could mean for markets? Explore our deep dive in Bitcoin Strategic Reserve now.
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