The United States plans to promote "BTC bonds", or borrow BTC value-added to offset trillions of dollars of Treasury bonds?

‍Under a policy framework released by the BTC Policy Institute, the U.S. Treasury Department may allocate $200 billion to purchase BTC through the proposed issuance of $2 trillion "BTC Enhanced Treasury Bonds" (hereinafter referred to as "BTC Bonds").

The structure of this "BTC bond" is intended to refinance a portion of the $14 trillion federal debt due in the next three years.

Each bond will use 90% of the proceeds to traditional government financing and 10% to purchase BTC, so that a strategic BTC reserve can be created without directly utilizing taxpayer funds.

Get BTC investment exposure at low interest rates

The proposed "BTC bond" has an annual interest rate of 1%, which is much lower than the current 10-year Treasury yield of about 4.5%. In exchange for accepting lower fixed returns, investors will obtain value-added returns linked to BTC through a structured payment mechanism when the bond matures.

Such payments will include full principal repayment, fixed interest, and the revenue portion linked to BTC. Within the annualized compound yield threshold, investors can obtain 100% of the value-added income of BTC. The investor can obtain 50% of the additional income after the threshold, and the rest is retained by the government.

Performance modeling based on earnings performance shows that the United States can still save about $354 billion in present value even if the BTC price remains stable over the 10-year term, subtracting $200 billion of BTC allocation funds from the estimated $554.4 billion interest savings.

The framework emphasizes that if BTC prices rise at historical median, the plan could offset a significant portion of Treasury bonds by 2045.

In addition, the "BTC Bond" proposal also includes tax-free treatment for interest payments and BTC-linked earnings, making it a retail investor-friendly savings product. 132 million American households are expected to participate, with an average investment of $3,025 per household.

The proposal also outlines the legislative and regulatory framework for incorporating tax incentives into legal provisions and is managed by the Ministry of Finance and the National Taxation Administration (IRS).

For institutional investors, "BTC bonds" provide a compliant channel to gain BTC exposure while maintaining Treasury bonds safe. About 80% of "BTC bonds" will be absorbed by institutional investors and foreign buyers, and the remaining 20% ​​will be sold to American households.

Implementation Roadmap and Risk Considerations

The plan includes three phases of implementation strategy: a pilot project of $5 billion to $10 billion, a legislative expansion phase, and full inclusion into the Ministry of Finance’s standard issuance agenda.

The plan includes a risk management agreement to deal with risks in BTC price fluctuations, market transactions, operational security and regulatory classification. In order to reduce market interference, the government will acquire US$200 billion in BTC through installment fixed investment and diversified trading channels.

The brief also details custody standards and coordination with federal regulators to clarify the classification of these bonds under securities, goods and tax laws.

The proposed $200 billion BTC purchase program will fund strategic BTC reserves, which were established by President Donald Trump in March 2025.

The order classifies BTC as “digital gold” and authorizes the development of a budget neutral strategy to expand national holdings. The initial reserve will be funded by forfeited BTC. The “BTC Bonds” program is based directly on this directive to expand reserves through public bond issuance without relying on additional tax revenue.

The policy brief pointed out that the reserve will be used as a means of store of value, and the assets will be properly custodian and will not participate in active transactions. The custody program includes multi-signature cold storage and a dedicated security infrastructure managed by a dedicated Ministry of Finance unit.

Long-term impact

Simulated scenarios based on BTC historical performance suggest that BTC reserves may accumulate trillions of dollars in value.

Assuming a historical median compound annual growth rate of 53%, by 2035, the value of BTC holdings in reserves could exceed $14 trillion, of which the government will retain a share of $6.5 trillion.

Even if BTC growth is in the 10th percentile, the government's reserve value may exceed the current U.S. gold reserves.

The BTC bond program is seen as an alternative to debt solutions based on traditional austerity policies or taxation. It achieves long-term fiscal stability through asset appreciation, which has the potential to reduce or offset future federal debt obligations.

The document also pointed out that the proposal will give the United States a leading position in integrating BTC in global sovereign finance, with far-reaching impact on financial resilience, debt management and digital asset market development.