According to a recently unveiled policy framework, the US Treasury might consider channeling $200 billion into Bitcoin (BTC) acquisitions via a proposed $2 trillion issuance of “Bitcoin-Enhanced Treasury Bonds.”
These bonds, known as “₿ Bonds,” are structured to refinance a segment of the $14 trillion federal debt set to mature in the coming three years.
Each bond would allocate 90% of its proceeds towards traditional government financing and 10% for BTC procurement, allowing the establishment of a Strategic Bitcoin Reserve without the need for direct funding from taxpayers.
### Lower Rates for Bitcoin Exposure
The proposed ₿ Bonds would present a 1% annual interest rate, significantly lower than the prevailing 10-year Treasury yield of around 4.5%. By accepting these reduced fixed returns, investors would gain exposure to Bitcoin’s potential upside through structured payouts at the bond’s maturity.
This payout consists of complete principal repayment, fixed interest, and a performance-linked Bitcoin component. Investors would benefit from 100% of BTC gains up to a compounded annual return threshold, after which 50% of additional gains would be paid, with the government retaining the rest.
Performance projections indicate that, even if Bitcoin prices remain stagnant over the 10-year term, the US could see a present value savings of about $354 billion after accounting for the $200 billion BTC investment against an expected $554.4 billion in interest savings.
The framework noted that if Bitcoin trends align with historical averages, the initiative could help offset considerable portions of the national debt by 2045.
Moreover, the ₿ Bond proposal suggests tax-exempt status for interest payments and Bitcoin-linked earnings, making these instruments a retail-friendly savings option. With forecasts estimating participation from 132 million US households, the average investment per household could be around $3,025.
The proposal outlines the necessary legislative and regulatory structures to secure these tax advantages, to be overseen by the Treasury and the Internal Revenue Service (IRS).
For institutional investors, ₿ Bonds provide a compliant way to gain Bitcoin exposure while maintaining the safety characteristics associated with Treasury securities. Approximately 80% of ₿ Bonds are expected to be acquired by institutional and foreign buyers, with the remaining 20% intended for US households.
### Implementation Roadmap and Risk Considerations
The rollout plan encompasses a three-phase strategy: an initial pilot program worth $5 billion to $10 billion, followed by a legislative expansion phase, and eventual integration into the Treasury’s regular issuance schedule.
The program will incorporate risk management measures to address Bitcoin price volatility, market execution, operational security, and regulatory classification. To mitigate potential market disruptions, the government would purchase the $200 billion in Bitcoin using a staggered dollar-cost averaging approach across diverse execution channels.
The framework also elucidates custody requirements and collaboration with federal regulatory agencies to define the bonds’ classification under securities, commodities, and tax regulations.
The initiative for the proposed $200 billion Bitcoin purchases is aimed at funding a Strategic Bitcoin Reserve established by a presidential executive order in March 2025.
This order categorizes Bitcoin as “digital gold” and authorizes the development of budget-neutral approaches to enhance national holdings. Bitcoin reclaimed through forfeiture will support the initial reserves. The ₿ Bond program directly builds on this directive, expanding reserves through public bond issuance without relying on extra tax income.
The brief emphasizes that the reserve will serve as a store of value, with assets secured in custody and excluded from active trading. Plans for custody include multi-signature cold storage and specialized security systems managed by a dedicated Treasury unit.
### Long-Term Implications
Situational modeling based on historical Bitcoin performance suggests that a Bitcoin reserve could amass trillions in value.
Assuming a median historical compound annual growth rate of 53%, BTC holdings in the reserve could potentially exceed $14 trillion by 2035, with the government maintaining a $6.5 trillion share.
Even at the 10th percentile of Bitcoin growth, the value held by the government in the reserve might surpass current US gold reserves.
The ₿ Bond initiative is positioned as an alternative to traditional austerity measures or tax-based debt solutions. It promotes long-term fiscal stability via asset appreciation, potentially alleviating or offsetting future federal debt obligations.
The proposal indicates that this initiative could place the US at the forefront of integrating Bitcoin into sovereign finance, with significant implications for financial resilience, debt management, and the development of digital asset markets.