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How does the US government 'zero-cost' accumulate BTC? Analyzing 10 major 'budget-neutral' strategies
The United States plans to establish a BTC reserve, emphasizing 'no additional burden on taxpayers'
With the US government officially incorporating Bitcoin (BTC) into the strategic reserve asset system, the Treasury and Commerce Departments are actively seeking 'budget-neutral' ways to accumulate BTC, ensuring that this policy will not incur additional costs to taxpayers.
This means that the US government cannot purchase BTC by raising taxes or increasing the budget, but must acquire BTC using existing assets, financial tools, mining infrastructure, and international economic and trade mechanisms.
Here are the top 10 potential strategies, covering asset conversion, financial innovation, government mining, and international cooperation, detailing how the United States can 'freely' establish a national-level BTC reserve.
Government asset conversion: cash out existing wealth for BTC
Exchange strategic petroleum reserves (SPR) for BTC
The United States has the world's largest strategic petroleum reserve (SPR), with a total of about 6.8 billion barrels. When oil prices are high, the government can sell some oil, use the proceeds in USD to purchase BTC, without affecting the national budget. This method does not impose additional burdens on taxpayers, and the SPR itself is a government asset. However, if the amount of SPR sold is too large, it may affect the international oil market and US energy policy.
The US Treasury holds about 8,100 tons of gold. If it sells some of the gold and converts the proceeds into BTC, it can realize the reconfiguration of the country's reserve assets. BTC and gold have similar hedging properties in the investment market, so this conversion is somewhat reasonable. However, gold has long been an important pillar of the US dollar credit system. Selling it may cause market unrest and even affect the global status of the US dollar.
The US government regularly auctions off confiscated assets from criminal cases, sanction violations, and corporate fines, including BTC. If the policy changes, the government can directly use the auction proceeds to purchase BTC instead of transferring them to the federal general fund. This strategy has precedents, such as the US Marshals Service's past auctions of confiscated BTC. The challenge lies in the government's need to adjust its fund management policies to earmark the auction proceeds specifically for BTC reserves.
Government Financial Innovation: Using Debt and Fine Mechanisms to Obtain BTC
Issuance of 'BTC-Backed Treasury Bonds' (Bitcoin-Backed Treasury Bonds)
The U.S. Treasury Department can issue national debt linked to Bitcoin to attract investors to purchase and use the raised funds to hold BTC. This method can raise funds to buy BTC through the national debt market without affecting the federal budget, attracting institutional investors to participate, and promoting the financialization and stability of BTC. However, the market's acceptance of BTC-linked national debt still remains uncertain, and investor confidence will determine its effectiveness.
When companies violate US laws (such as export controls, financial fraud), they usually need to pay fines or settlements. The government can allow Bitcoin to be used to pay such amounts and directly deposit them into the strategic BTC reserve. This is an additional source of income that does not affect the federal budget. However, companies may resist BTC payments and still prefer to use fiat currency. The implementation of the policy will take time and market adaptation.
The Federal Reserve owns trillions of dollars in assets and may consider converting some foreign exchange reserves or asset allocations to Bitcoin, managed by the Treasury Department. This strategy does not involve the federal budget and will not affect taxpayers' burden. If the Federal Reserve formally incorporates Bitcoin as a reserve asset, it will have a significant impact on the global market. However, this may trigger international monetary policy and US dollar credit issues, and the US government needs to evaluate it carefully.
Government mining: directly produce BTC
The United States has abundant hydro, nuclear, and other low-cost energy sources. The government can use idle electricity and supercomputing resources to carry out BTC mining. The mining cost is relatively low, allowing for stable acquisition of BTC. The Department of Energy (DOE) and national laboratories (such as Oak Ridge National Lab) in the United States already have high-performance computing equipment that can be used for BTC mining. However, this move may trigger controversies over environmental protection and energy use, especially in the context of global carbon neutrality efforts, prompting the government to carefully manage carbon footprint issues.
The U.S. government owns 28% of the country's land, allowing businesses to set up BTC mining facilities on military bases, federal lands, and Indian reservations, and pay rent or royalties in BTC. This approach does not require additional government investment, operates entirely on a market basis, and can provide a stable source of income for BTC reserve plans. However, this policy may face challenges related to environmental protection and land use, requiring the government to engage in full consultations with local communities.
Four, International Strategy and Economic Cooperation
The US government can negotiate with trading partners to allow BTC to be used for international trade payments in energy, military equipment, and other areas, thus accumulating BTC reserves. If the US can integrate BTC into the international trade settlement system, it will enhance BTC's position in the global financial market. However, this may face resistance from international regulatory bodies, and the reactions of other major economies will also affect policy effectiveness.
The United States provides technical and economic assistance to developing countries every year, and can request some of the aid to be paid in BTC, directly accumulating BTC reserves. This will be an innovative way to allow the United States to increase its BTC holdings without additional budget increases. However, the uncertainty of whether the recipient countries will accept BTC still exists, and the government needs to negotiate with international partners to ensure the feasibility of the plan.
Can the US government accumulate BTC for 'free'?
Through various means such as asset conversion, financial tools, mining, and international trade, the US government can indeed gradually establish a strategic BTC reserve without increasing the burden on taxpayers. With the implementation of these strategies, the US will further consolidate the position of BTC in the global financial system, and may even trigger other countries to emulate, initiating a global 'national-level BTC reserve competition'.
This article How does the US government 'zero-cost' accumulate BTC? Analysis of the top 10 'budget-neutral' strategies first appeared on ChainNews ABMedia.