US Makes History, Signs the Strategic Bitcoin Reserve Bill into Law

On January 23, 2025, President Donald Trump signed the Strategic Bitcoin Reserve Bill, a historic decision that brings Bitcoin into the heart of the US economy.

On January 23, 2025, President Donald Trump signed the Strategic Bitcoin Reserve Bill, a historic decision that brings Bitcoin into the heart of the U.S. economy. The bill outlines plans to create a national Bitcoin reserve, positioning the U.S. as a key player in the digital asset world. This move has sparked discussions globally, not only for its boldness but also for its potential to transform the U.S. economy and influence global markets.

Could this move reshape how nations view reserve assets and redefine the global financial system? This question underscores the potential of Bitcoin to shift power dynamics in the financial world.

Here's a closer look at the bill, its provisions, and its potential impact on the crypto market, the U.S. dollar, and the broader financial landscape.

What Is the Bitcoin Reserve Bill?

The Strategic Bitcoin Reserve Bill is a legislative proposal aimed at establishing a national reserve of Bitcoin for the United States. The primary objectives of the bill include:

Establishing a national Bitcoin reserve to enhance U.S. financial security and hedge against inflation.

Boosting the country's technological leadership by integrating Bitcoin into the U.S. financial system.

Creating a legal framework for digital assets, including Bitcoin, to foster innovation and protect consumers.

The bill outlines a five-year plan for the U.S. government to acquire 1 million bitcoins, aiming to secure 5% of the total Bitcoin supply. This move would effectively make the United States one of the largest holders of the cryptocurrency.

Key Provisions of the Bitcoin Reserve Bill

The Bitcoin Reserve Bill lays out a comprehensive strategy to incorporate Bitcoin into the U.S. financial system. Here are the major components of the law:

Establishing a National Bitcoin Reserve

The U.S. government will aim to acquire 1 million bitcoins over a five-year period. This would account for 5% of Bitcoin’s total supply, making the U.S. one of the largest holders of the cryptocurrency.

Annual Bitcoin Purchases

To reach the target, the federal government will purchase 200,000 bitcoins annually for 5 years. The funding for these purchases will come from:

Surplus tax revenue from capital gains on digital assets

Proceeds from the sale of federal land

Creation of the Digital Asset Oversight Committee

A Digital Asset Oversight Committee will be established to oversee the acquisition, storage, and management of the Bitcoin reserve. The committee will:

Be chaired by the Secretary of the Treasury and include representatives from the Federal Reserve, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.

Set guidelines for the government's entry and exit strategies in the Bitcoin market.

Determine the optimal storage and security measures for the Bitcoin reserve.

Regulatory Clarity

The Bitcoin Reserve bill emphasizes creating a clear and consistent regulatory framework for Bitcoin and other digital assets. This includes:

Defining Bitcoin as a monetary asset, distinct from a security or a commodity.

Establishing clear rules for the taxation of digital assets, including Bitcoin.

Directing the SEC and CFTC to work together to develop a unified regulatory approach for digital assets.

Statistics Of The Bitcoin Reserve

As of January 2025, some key considerations to weigh a prospective Strategic Bitcoin Reserve looks something like the following snapshot;

These are dynamic numbers. The economy changes regularly and its benchmarks change over time.

El Salvador Bitcoin Journey

While the US Bitcoin Reserve Bill is a landmark, the first country was El Salvador which, in September 2021, became the first country to adopt Bitcoin to be used legally. This new move has, in turn, reshaped its entire financial world. A blueprint perhaps, and a cautionary case study for many other nations wanting to do this.

Why Do El Salvador Need Bitcoin?

El Salvador had several economic issues that compelled it to turn towards Bitcoin adoption:

Remittances Dependence

Remittances make up 23% of El Salvador’s GDP, with millions of citizens receiving money from abroad. Traditional remittance services like Western Union charge high fees, reducing the amount families receive. Bitcoin offered a cheaper and faster way to transfer money.

Limited Financial Inclusion

Over 70% of Salvadorans lacked access to banking services. This meant that a majority of the population was not engaged with any form of financial systems. Bitcoin and digital wallets like Chivo allowed unbanked citizens to send, receive, and store money digitally. Therefore, financial services became more accessible.

El Salvador uses the U.S. dollar as its official currency, which limits the control of the monetary policy of the country. By using Bitcoin, the government was seeking to diversify its financial system and gain more independence.

Steps Taken to Impact Bitcoin Adoption

To adopt Bitcoin, El Salvador took several measures:

Making Bitcoin legal tender throughout the country from September 7, 2021.

Launching the Chivo digital wallet for citizens to use Bitcoin and receive a $30 sign-up