Congress Mandates Treasury to Develop Strategic Bitcoin Reserve Plan with 90-Day Deadline

What's Happening?

Congress has set a 90-day deadline for the U.S. Treasury to outline a Strategic Bitcoin Reserve plan, as part of the FY2026 Financial Services and General Government bill, H.R. 5166. This legislative move requires the Treasury to submit a report on the feasibility of establishing a federal Bitcoin reserve and a digital asset stockpile. The report must address custody, cybersecurity, and how these assets will be reflected on the federal balance sheet. The initiative builds on a March executive order that introduced the concept of a federal Bitcoin stockpile. Recent market changes, such as the approval of spot Bitcoin ETFs, have influenced the handling of Bitcoin, allowing direct transactions without cash conversion. The U.S. Marshals Service currently controls approximately 29,000 BTC, with the total government-held Bitcoin estimated at 198,000 BTC.

Why It's Important?

The establishment of a Strategic Bitcoin Reserve could significantly impact the U.S. financial landscape, influencing market dynamics and investor sentiment. The Treasury's approach—whether to hold, buy, or lend Bitcoin—will affect Bitcoin's market liquidity and volatility. A 'HODL' strategy could lock Bitcoin in a reserve, reducing market float and potentially increasing volatility. Alternatively, a lending strategy could enhance market liquidity without selling assets. The decision will also affect the U.S. government's role in the digital asset market, potentially setting a precedent for other nations. The outcome of this initiative could reshape how Bitcoin is integrated into the broader financial system.

What's Next?

Following the enactment of H.R. 5166, the Treasury has 90 days to develop and submit its strategic plan. This period will be crucial for determining the government's stance on Bitcoin management, including custody and inter-agency coordination. The Treasury's decisions will likely influence ongoing ETF flows and market conditions. Stakeholders, including financial institutions and digital asset investors, will closely monitor the Treasury's actions, as they could have lasting implications for market stability and regulatory frameworks.