White House plans to establish BTC strategic reserve? Legal obstacles, jurisdictional disputes, and the legislative prospects for 1 million BTC

In March 2025, U.S. President Trump signed Executive Order No. 14233, formally launching the “Strategic Bitcoin Reserve” program. This concept—dubbed “Digital Fort Knox” by the industry—aims to consolidate the Bitcoins obtained by the federal government through criminal and civil forfeiture proceedings into a permanent national reserve asset. However, after 16 months, today the program still remains in the discussion and deliberation stage. A “never-ending triangle” involving the jurisdictional fight between the Treasury and the Commerce Departments, fundamental challenges to the nature of the legal authorization, and political variables in congressional legislation collectively make up the “impossible triangle” of the White House’s strategic Bitcoin reserve.

Why Is There a Break Between the Executive Order and Legislative Proposals

Although an executive order provides a political signal to initiate a strategic Bitcoin reserve, it cannot replace the full force of law. Patrick Witt, the White House’s crypto adviser, publicly acknowledged at a Bitcoin conference in April 2026 that Trump’s executive order does not have full legal force and that it must rely on congressional legislation to formally launch the Bitcoin reserve.

The core content of the executive order is as follows: prohibit the sale of Bitcoins obtained by the government through criminal and civil forfeiture proceedings; store them in a dedicated reserve managed by the Treasury; and instruct the Treasury and the Commerce Department(s) to develop a “budget-neutral” Bitcoin acquisition strategy. “Budget-neutral” means expanding the reserve without increasing taxes, expanding deficits, or taking on new national debt obligations.

However, the limitation of the executive order is that it can only constrain internal actions of the executive branch and cannot provide institutional safeguards for the long-term survival of the reserve. The next administration could overturn it with a new executive order. This policy uncertainty is precisely the core issue that lawmakers are trying to address through enacted statutes.

Why the Treasury Department Cannot Directly Take Over the Bitcoin Reserve

The issue of legal authority is the primary obstacle facing the strategic Bitcoin reserve. According to a Bloomberg report citing people familiar with the matter, whether the U.S. Treasury Department has the legal authority to manage a Bitcoin reserve has drawn questioning from officials within the government.

The essence of the problem is whether the statutory scope of the U.S. Treasury Department includes the long-term custody of Bitcoin as a federal reserve asset. Bitcoin is neither legal tender nor a traditional commodity or security, and its legal classification itself remains controversial. The Treasury Department’s existing legal authorization framework is mainly built around the U.S. dollar, U.S. Treasury bonds, and traditional financial assets. Incorporating a decentralized crypto asset into national reserve management lacks clear legal basis.

In addition, Bitcoin’s high volatility has prompted internal government discussions about whether such a highly volatile asset can be held “indefinitely.” Bitcoin reached an all-time high of $126,080 in October 2025, but by July 2026 it had fallen by nearly 50%. Bloomberg’s analysis notes that if the U.S. government had purchased at a price of $93,000 when Trump first called for it, it would have already incurred roughly one-third in paper losses.

Why the Commerce Department Became an Alternative for Reserve Management Authority

After the legal authorization issue surfaced, discussions shifted to placing the strategic Bitcoin reserve under the jurisdiction of the Commerce Department. This shift reflects a reassessment within the U.S. government of the reserve-management framework.

The advantage of the Commerce Department is that its jurisdiction covers areas such as international trade, technology policy, and economic development, which may allow more flexible legal space for managing a new class of assets. However, whether the Commerce Department has the experience and capability to manage national strategic reserve assets is also subject to skepticism.

The direct consequence of this jurisdictional dispute is that the 60-day assessment report required by the executive order has still not been submitted to date. As of July 2026, more than 16 months after the executive order was signed, the standoff between the two departments continues. While both Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been authorized to develop budget-neutral Bitcoin acquisition strategies, given the backdrop of the two departments fighting over management authority, policy implementation remains uncertain.

What Are the Similarities and Differences Between the BITCOIN Act and the ARMA Bill?

Against the backdrop of insufficient legal force of the executive order, legislative efforts at the congressional level have become the key pathway to institutionalizing the strategic Bitcoin reserve. This legislative process has gone through significant evolution.

BITCOIN Act (Senate Bill No. 954) was first introduced in 2024 by Wyoming Senator Cynthia Lummis. Its core content requires the federal government to purchase 200,000 Bitcoins each year within five years, totaling 1,000,000 Bitcoins, and to hold them for at least 20 years. However, due to political resistance in Congress—stemming from high fiscal costs and concerns that it may weaken the status of the dollar—advancing the bill has been difficult.

ARMA Bill (American Reserve Modernization Act) was formally introduced on May 21, 2026 by Alaska Republican Representative Nick Begich and Maine Democratic Representative Jared Golden, and received joint support from more than 14 members from both parties. Compared with the BITCOIN Act, the ARMA Bill takes a more conservative path: it no longer mandates the government to purchase 1,000,000 Bitcoins; instead, it includes Bitcoins already held by the government and Bitcoins acquired in the future through forfeiture into the strategic reserve, and sets a mandatory lock-up period of at least 20 years.

However, it is worth noting that some reports show Begich and Lummis are still pushing for a legislative version that includes a 1,000,000 acquisition target. This inconsistency in the legislative text reflects ongoing differences within Congress regarding the path to expanding the reserve.

How Does a 20-Year Mandatory Lock-Up Period Change the Attributes of Reserve Assets?

The most notable provision of the ARMA Bill is the imposition of a mandatory holding period of at least 20 years for Bitcoins in the reserve. During this period, Bitcoins in the reserve may not be sold, exchanged, auctioned, pledged, or otherwise disposed of in any way.

The strategic intent of this clause is to transform Bitcoin from a “seizable asset that can be disposed of” into an “untouchable national strategic reserve”—similar to gold or strategic energy reserves—rather than a tradable asset that can change with changes in government. The White House emphasizes that past early selling of Bitcoins has caused taxpayers losses of approximately $17 billion, and long-term holding is necessary to achieve strategic advantages.

After the 20-year lock-up period ends, the Secretary of the Treasury may recommend selling up to an amount equal to 10% of the reserve during any two-year period. The bill also requires quarterly public disclosure of the reserve holdings, and introduces an independent third-party audit mechanism.

In addition, the ARMA Bill explicitly prohibits the federal government from impairing Americans’ rights to lawfully own, transfer, or self-custody digital assets through reserve management. This provision is designed to preemptively block any regulatory moves that would restrict individual Bitcoin ownership under the name of “national reserve management.”

What Does the 1,000,000-Bitcoin Reserve Target Mean?

A reserve target of 1,000,000 Bitcoins, regardless of how it is achieved, will have a structural impact on the global Bitcoin supply-and-demand landscape.

Share of Global Circulating Supply: Bitcoin’s total supply is permanently capped at 21,000,000 coins. As of 2026, the number of Bitcoins circulating globally is approximately 19,800,000. 1,000,000 Bitcoins account for more than 5% of the global circulating supply, and about 4.8% of the total Bitcoin supply.

Comparing Government Holdings: According to estimates by Arkham Intelligence, the U.S. government currently holds approximately 328,000 Bitcoins, with a market value exceeding $21 billion. This scale has already made the United States the largest sovereign Bitcoin holder in the world. As for other government holdings: the United Kingdom controls about 61,245 Bitcoins, El Salvador holds about 7,500, and Bhutan holds about 5,400. According to CoinGecko research, governments worldwide collectively hold approximately 471,380 Bitcoins, accounting for 2.6% of the total circulating supply.

Market Impact Assessment: If the ARMA Bill’s 1,000,000 acquisition target is implemented, it would mean that the U.S. government would net add more than 670,000 Bitcoins to its holdings within five years (from the current 328,000 to 1,000,000). The average annual acquisition would be about 134,000 Bitcoins. At current prices, that corresponds to approximately $8.5 billion in capital inflows per year. Sustained buying at this scale would have a far-reaching impact on market supply and demand.

How Will the Midterm Elections in 2026 Affect the Progress of Reserve Legislation?

The legislative outlook for the strategic Bitcoin reserve faces a key political variable: the midterm elections in November 2026.

Begich has made it clear that the purpose of the ARMA Bill is to ensure that Bitcoin is treated as a reserve asset and that the policy is locked in, preventing future administrations from changing course. However, if the Republican Party that is inclined to support the crypto industry loses its majority in the midterm elections, the bill may be difficult to pass in the near term.

From the perspective of the legislative process, the ARMA Bill must be passed separately in the House of Representatives and the Senate and signed by the President to become law. Although the bill has characteristics of bipartisan support (co-led by Republican Begich and Democrat Golden), it still faces major procedural obstacles in the Senate.

In a statement, White House spokesperson Liz Huston said the government will continue to evaluate the best reserve framework to carry out the vision of establishing a digital asset stockpile, but she did not provide a specific timeline. Witt’s promise in April 2026 that there would be “major announcements within weeks” has not been fulfilled to date.

Summary

The White House’s strategic Bitcoin reserve plan is stuck in an institutional gap between an executive order and congressional legislation. Fundamental doubts about legal authorization prevent the Treasury Department from directly taking over the reserve. The jurisdictional dispute has pushed the Commerce Department into an alternative position, and the ebb and flow between the BITCOIN Act and the ARMA Bill reflects a strategic shift in the legislative path from “aggressive expansion” to “consolidating existing holdings.”

Regardless of whether the final management framework is the Treasury Department, the Commerce Department, or another department—regardless of whether the reserve size is the current 328,000 Bitcoins or the 1,000,000 target—this power struggle itself has already confirmed one fact: Bitcoin is moving from a fringe asset to a candidate for national strategic reserve status. For the market, what truly matters is not “whether it will happen,” but “in what way and over what time frame it will happen”—and that is precisely at the core of the ongoing contest among legal, fiscal, and political forces within the “impossible triangle.”

Frequently Asked Questions

Why is the U.S. strategic Bitcoin reserve currently in a stalemate?

According to Bloomberg, there are two main obstacles: the dispute over management authority between the Treasury and the Commerce Department(s), and whether the Treasury Department has the legal capacity to legally manage a Bitcoin reserve. The executive order has been in effect for more than 16 months since it was signed in 2025, but it lacks full legal force, meaning it must rely on congressional legislation to be formally launched.

How much Bitcoin does the U.S. government currently hold?

According to estimates by Arkham Intelligence, the U.S. government currently holds approximately 328,000 Bitcoins, with a market value exceeding $21 billion. These assets mainly come from criminal and civil forfeiture proceedings, including assets recovered from the well-known Silk Road dark web case and the Bitfinex hacker case.

What is the difference between the BITCOIN Act and the ARMA Bill?

The BITCOIN Act requires the government to purchase 1,000,000 Bitcoins within five years and hold them for 20 years. The ARMA Bill is more conservative: it no longer mandates purchases, but instead includes Bitcoins already held by the government and those obtained through future forfeitures into the reserve, and it also sets a 20-year mandatory lock-up period. However, some lawmakers are still pushing for a legislative version that includes a 1,000,000 acquisition target.

What is the significance of the 20-year mandatory lock-up period?

The purpose of this clause is to transform Bitcoin from a “seizable asset that can be disposed of” into an “untouchable national strategic reserve,” protecting it from short-term political pressure—similar to gold or strategic energy reserve positioning. During the lock-up period, Bitcoins may not be sold, exchanged, auctioned, pledged, or disposed of in any other way.

How does the midterm election in 2026 affect reserve legislation?

If the Republican Party that is inclined to support the crypto industry loses its majority in the November 2026 midterm elections, the ARMA Bill may be difficult to pass in the near term. Although the bill has support from both parties, it still faces major procedural obstacles in the Senate.