New bipartisan legislation has been introduced in the U.S. House of Representatives that proposes the establishment of a strategic reserve for government-held Bitcoin (BTC), mandating a minimum 20-year holding period. This legislative effort, known as the “American Reserve Modernization Act of 2026” (ARMA), follows a previous executive order aimed at creating a national Bitcoin stockpile and a separate digital asset reserve for non-Bitcoin assets. The bill seeks to formalize the management and safeguarding of these digital assets by the Treasury Department.
Key Takeaways
- The ARMA legislation mandates a 20-year lockup period for any Bitcoin designated for the Strategic Bitcoin Reserve, restricting its disposal.
- It eliminates the previous proposal’s target of acquiring 1 million BTC, instead directing government agencies to study budget-neutral acquisition methods.
- The bill requires quarterly public proof-of-reserve disclosures and independent third-party audits of government Bitcoin holdings.
- ARMA also necessitates federal agencies to disclose all digital assets under their control within 60 days of the bill’s enactment.
- Potential acquisition strategies explored include converting existing non-Bitcoin assets, revaluating gold certificates, forfeiture proceedings, and tariff revenues.
Spearheaded by Representatives Nick Begich (R-Alaska) and Jared Golden (D-Maine), ARMA outlines specific parameters for managing U.S. government Bitcoin holdings. Under the proposed act, any Bitcoin allocated to the Strategic Bitcoin Reserve would be held for a minimum of two decades, with stringent prohibitions against selling, swapping, auctioning, or otherwise disposing of these assets. Following the expiration of this lockup period, the Treasury Secretary would be permitted to recommend the sale of up to 10% of the reserve’s assets over a two-year span. This approach signifies a shift towards long-term asset preservation rather than active trading or liquidation.
The legislative initiative appears to align with and seek to codify policies previously outlined by President Donald Trump’s administration. An executive order from 2025 had directed the creation of a Bitcoin reserve and digital asset stockpile, largely to be funded by cryptocurrencies acquired through criminal and civil forfeiture processes. Treasury Secretary Scott Bessent reaffirmed this policy direction in January, stating the government’s intention to add seized Bitcoin to the digital asset reserve and to halt its previous practice of selling such assets.
Regulatory Precedent and Legal Implications
The ARMA bill, by proposing a legally binding framework for government digital asset reserves, could set a significant regulatory precedent. Establishing a long-term, auditable reserve of Bitcoin signifies a formal acknowledgment of its potential role within national financial strategy, distinct from its status as a speculative asset or payment system. The mandatory lockup period and stringent disclosure requirements address key concerns around transparency and accountability, which have been central to regulatory discussions surrounding digital assets globally. Furthermore, the exploration of “budget-neutral” acquisition methods, if enacted, could offer novel, albeit complex, pathways for governments to integrate digital assets into their financial holdings without direct budgetary outlays. This could influence how other nations approach sovereign digital asset management and the legal structures required to support such initiatives, potentially drawing parallels with or diverging from frameworks like the European Union’s Markets in Crypto-Assets (MiCA) regulation concerning asset classification and management standards.
Unlike prior legislative proposals, such as the BITCOIN Act, which contemplated the acquisition of up to 1 million BTC over five years, ARMA does not stipulate a specific purchase target. Instead, it directs the Treasury and Commerce departments to investigate the feasibility of acquisitions through “budget-neutral” mechanisms. These potential methods include the conversion of existing non-Bitcoin assets, revaluation of gold certificates, proceeds from forfeiture proceedings, tariff revenues, and collaborations with state governments. This approach suggests a more cautious and fiscally conservative strategy for expanding the reserve.
The bill also mandates that federal agencies provide a comprehensive accounting of all digital assets in their possession within 60 days of the legislation’s enactment. Current estimates from unofficial sources, such as Arkham Intelligence, suggest that U.S. government holdings of cryptocurrencies, predominantly Bitcoin, Ether, and USDT, are valued at approximately $26 billion. To ensure accountability, ARMA includes provisions for quarterly public proof-of-reserve reports, independent audits, and enhanced congressional oversight, aiming to foster transparency in the management of these digital assets.
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