Why the US Bitcoin reserve is stuck on paper — ForkLog

# Why the US Bitcoin reserve is stuck on paper

In March 2025, US President Donald Trump signed an executive order to create a Bitcoin reserve. The industry received the decision with enthusiasm, expecting government purchases of the first cryptocurrency and a new source of demand in the market

Against this backdrop, the topic began to be discussed in other countries. Some talked about creating strategic funds and transforming the global financial system, while others criticized the approach. However, it soon became clear that the US strategic Bitcoin reserve is set up quite differently from what the market expected.

ForkLog looked into which countries are truly making digital assets part of reserve policy, and which ones have not moved beyond discussions.

Big promise

In spring 2025, the idea of a government cryptocurrency reserve sounded like a possible turnaround not only for the industry, but also for the global financial system. On March 2, Trump said a working group should accelerate the creation of a “strategic reserve of digital assets.” The list included five coins at once: BTC, ETH, SOL, XRP, and ADA.

The market responded with a rise. Participants expected not only recognition of Bitcoin at the state level, but also potential purchases by the world’s largest economy. As for the altcoins, even their inclusion on the list was seen as a positive sign.

However, it soon turned out that the initiative was gradually losing relevance. At a crypto summit at the White House, the administration made it clear it was betting specifically on Bitcoin. US Secretary of Commerce Howard Lutnick said the currency would be considered separately from other digital assets.

What Trump actually signed

The real contours of the project were set by the executive order. It split the initiative into two tracks: the “Strategic Bitcoin Reserve” (SBR) and a “Reserve of digital assets” intended for other coins.

A crucial nuance was hidden in where the funds would come from. The plan was not to fill them through regular budget purchases, but through assets seized as part of criminal and civil cases. Former Trump adviser on AI and cryptocurrencies David Sacks emphasized that the project “would not cost taxpayers a single cent.”

As a result, instead of creating new demand, the government reclassified the seized assets as a long-term investment.

The administration’s position was finalized by Treasury Secretary Scott Bessent. The strategy boiled down to three points:

• not to buy Bitcoin with public funds;
• to keep the already accumulated coins;
• to replenish the reserve with assets seized in legal proceedings.

Later, Bessent added that the department is studying “budget-neutral” ways to expand the reserve, but no specific mechanism was provided.

The most ambitious scenario remained in the Senate. On March 11, 2025, Cynthia Lummis introduced an updated Bitcoin Act. The bill proposed buying up to 200,000 BTC per year over five years to bring the reserve to 1 million coins and lock them up for 20 years. The bill did not get support in Congress

By 2026, it turned out that even the basic structure had stalled. In July, Bloomberg reported that work on the SBR was being slowed by disagreements between federal agencies. Although the order assigned reserve management to the Treasury Department, officials began discussing whether the department had the necessary competencies and expertise to manage such a specific asset. Among the possible agencies that could be tasked with managing the reserve, the US Department of Commerce and the US Department of Justice were mentioned. The White House continued searching for the optimal management structure.

At the same time, the idea was attempted to be codified in law. In May, the American Reserve Modernization Act (ARMA) was introduced in the House of Representatives. The document transfers the reserve to the Treasury Department, requires agencies to centrally send coins for storage, introduces quarterly reports, independent audits, and congressional oversight. Bitcoin is proposed to be held for at least 20 years and sold only to reduce the national debt. The 1 million BTC target, as in the Bitcoin Act, is no longer included in ARMA.

According to BitcoinTreasuries, at the time of writing, the US ranked first among holding countries with 328,372 BTC.

Source: BitcoinTreasuries.## Kazakh approach

Other countries are also trying to implement digital asset fund projects. One example is Kazakhstan, where at the direction of the president, work began on forming a National Strategic Crypto Reserve. According to government estimates, its size over time could reach $700 million.

The funding sources are outlined in advance. Up to $350 million could come from investing a portion of the National Bank’s foreign currency and gold assets; another up to $350 million could come from the National Fund’s assets. In addition, the government wants to include other state assets in the reserve by decision of the government, including confiscated cryptocurrencies. The scheme is close to the US “no burden on taxpayers” approach, but it is supplemented with a plan for active investments rather than simple storage.

The reserve will be managed by the National Bank’s National Investment Corporation, while the accounting and custody of digital assets will be handled by CJSC “Central Depository for Securities.” The assets are planned to be directed into digital coins, derivative instruments based on them, and also into stocks and equity stakes in companies developing this sector. Investments via hedge funds are also being studied separately.

The reserve became part of a broader strategy. In July, President Kassym-Jomart Tokayev signed an order “On measures to stimulate and develop the digital asset industry.” The document sets a framework for the entire sector: the use of cryptocurrencies and stablecoins in cross-border settlements, moving operations into the legal framework through voluntary disclosure of assets from foreign platforms and transferring them to domestic providers.

It is this institutional clarity that distinguishes the Kazakh approach from the American one. The reserve has an owner, a manager, a custodian, sources of replenishment, an investment plan, and mandatory annual reporting—and it is built into the overall industry development strategy.

Who else is in the game

National crypto reserves have attracted attention not only in the US and Kazakhstan. According to BitcoinTreasuries, governments collectively hold about 649,961 BTC—roughly 3.1% of the total supply.

Source: BitcoinTreasuries.Some positions are the result of confiscations rather than an intentional reserve policy. Therefore, approaches to Bitcoin by governments can be divided into several scenarios:

1. Accumulation through seizures. The US and partly Kazakhstan follow this path: the reserve is largely made up of Bitcoin obtained this way, not market purchases. The advantage of this approach is the lack of budget spending. The downside is that the reserve depends on law enforcement activity, court rulings, and the movement of these coins.
2. Mixed approach. For Kazakhstan, part of the sources are tied to government assets and investments, while another part comes from confiscation.
3. Direct purchases. The most well-known example is El Salvador. The country has been buying Bitcoin for years in small lots and publicly showing the balance. The approach is controversial from a risk standpoint, but it is understandable in terms of transparency: it is clear how many coins were bought and at what price.
4. Reserve through mining. This is what Bhutan does. The government uses excess hydropower to mine Bitcoin and has built up a sizable reserve relative to the size of the economy.
5. Discussion without action. This category includes most countries. Central banks and ministries considered holding part of reserves in the first cryptocurrency, but it did not go beyond statements and analytical memos. For example, the head of the Czech National Bank, Aleš Michl, publicly allowed for studying digital gold as a reserve asset—without moving on to purchases.

At the level of individual US states, the picture is also mixed. Some passed laws on their own Bitcoin reserves, while others rejected similar initiatives. There still has not been a unified federal approach to purchases.

As a result, the pioneers of the strategic crypto reserve have not been able to show how this should work in practice. Their version so far resembles a new regime for storing confiscated coins more than a full-fledged tool of state financial policy.

A reserve with no answer to the question of “why”

The problems of the US SBR are not limited to a lack of infrastructure. Any classic reserve has a function: oil smooths shocks, and currency ensures financial stability. The US Bitcoin reserve has no such role—coins cannot be spent, they do not back the dollar, and they solve no tasks. There is no consensus in the country on whether the coin should be treated as a sovereign asset worth not sparing budget funds for.

It is telling that the state which loudly announced the creation of a crypto reserve set an example of inaction, while practice is being shaped by those who act more quietly. Kazakhstan laid out a plan, El Salvador buys Bitcoin and shows the balance, Bhutan mines it using its hydropower.

Hence the conclusion: the size of the reserve does not indicate its significance. The US holds the most Bitcoin and is the farthest from a working tool, because behind the number there is neither a purpose nor a mechanism. Until there is an answer, any crypto reserve remains paper-based.