In the United States, debates over Bitcoin policy have intensified with the introduction of the American Reserve Modernization Act (ARMA). This proposed legislation outlines a comprehensive legal framework to establish a Strategic Bitcoin Reserve under the Department of the Treasury, marking a significant new phase in digital asset policy discussions.
A detailed framework for the reserve
Unlike previous political statements and proposals, ARMA presents concrete guidelines for the purchase, custody, reporting, and auditing of Bitcoin. The bill identifies Bitcoin as a reserve asset capable of supplementing traditional national reserves, and positions it distinctly apart from other digital assets.
Lawmakers highlight Bitcoin’s limited supply, widespread adoption, and resilience as qualities that could strengthen the financial security of the United States. The draft law separates Bitcoin from other crypto assets by proposing a dedicated strategic reserve for Bitcoin, while mandating a different asset holding structure for non-Bitcoin digital assets.
The ARMA draft delivers a comprehensive framework for establishing a Strategic Bitcoin Reserve in the Treasury Department, centralizing processes for acquisition, custody, audit, and public proof-of-reserve disclosures.
Under ARMA, the Treasury Secretary would be tasked with building a secure and decentralized network of Bitcoin storage facilities across the US. This network would house the Strategic Bitcoin Reserve, employing cold wallet methods to hold state-owned Bitcoin. Oversight, auditing, and security would be conducted by the Treasury, with input from the Department of Defense, Department of Homeland Security, and independent sector experts to ensure robust security measures.
Mini glossary: A cold wallet refers to a method of storage that is not constantly connected to the internet, commonly used in institutional custody to reduce cyberattack risks by keeping private keys offline.
Mandatory 20-year holding period
One of the bill’s most notable provisions requires that any Bitcoin acquired for the reserve must be held for at least 20 years. During this period, reserved assets cannot be sold, auctioned, exchanged, or otherwise disposed of under any circumstance.
Two years before the 20-year holding period concludes, the Treasury Secretary would be required to submit recommendations to Congress regarding the management of the assets after the period expires. This ensures legislative involvement in the long-term management approach following the initial storage phase.
1 million BTC target in five years
The bill also proposes the establishment of a Bitcoin Purchase Program, granting the Treasury authority to acquire 200,000 BTC annually over five years. The declared aim is to obtain a total of 1 million BTC using structured purchases to mitigate excessive impact on market prices.
Additionally, the draft allows the acquisition of Bitcoin through forfeiture, inter-agency transfers, donations, and other lawful means. All such Bitcoin must be moved into the Strategic Bitcoin Reserve and adhere to the same custody and long-term holding rules.
Oversight, transparency, and options for states
On the financing side, the legislation points to mechanisms involving Federal Reserve resources and the revaluation of gold certificates. Proposed amendments to federal law would allow Bitcoin assets to be managed within the Exchange Stabilization Fund, with additional reporting requirements imposed on these holdings and related transactions.
The bill requires quarterly proof-of-reserve reports, third-party cryptographic audits, and Congressional oversight as standard procedures. Rather than selling Bitcoin held by federal institutions, the draft encourages transferring these assets into the reserve. There is also a voluntary program allowing US states to maintain segregated Bitcoin holdings with protected ownership rights. Importantly, the text makes explicit that the federal government cannot seize or impair legally acquired Bitcoin private property belonging to individuals or organizations.
