According to a policy framework released by the BTC Policy Institute, the U.S. Treasury could potentially issue $2 trillion in "BTC-Enhanced Treasury Bonds" (hereinafter referred to as "BTC Bonds") and allocate $200 billion to purchase BTC.

This structure of the "BTC Bonds" is designed to refinance a portion of the $14 trillion in federal debt maturing over the next three years.

Each bond would allocate 90% of its proceeds to traditional government financing and 10% to purchasing BTC, thereby creating a strategic BTC reserve without directly using taxpayer funds.

Low-Cost BTC Investment Exposure

The proposed "BTC Bonds" would have an annual interest rate of 1%, significantly lower than the current approximate 4.5% yield on 10-year Treasury notes. In exchange for accepting a lower fixed return, investors would receive appreciation gains linked to BTC through a structured payment mechanism at bond maturity.

This payment would include full principal repayment, fixed interest, and a portion of gains linked to BTC. Within the annualized compound return threshold, investors would receive 100% of the BTC appreciation gains. For any gains exceeding the threshold, investors would receive 50% of the additional gains, with the remainder retained by the government.

Performance-based modeling shows that even if the BTC price remains flat over the 10-year period, the U.S. could still save approximately $354 billion in present value, after subtracting the $200 billion allocated for BTC from the projected interest savings of $554.4 billion.

The framework emphasizes that if BTC prices rise according to historical medians, the plan could offset a significant portion of the national debt by 2045.

Additional Features of BTC Bonds

Moreover, the "BTC Bonds" proposal includes tax-exempt treatment for interest payments and gains linked to BTC, making it a retail investor-friendly savings product. It is projected that 132 million American households would participate, with an average investment per household potentially reaching $3,025.

The proposal also outlines a legislative and regulatory framework for incorporating tax incentives into law, to be managed by the Treasury Department and the Internal Revenue Service (IRS).

For institutional investors, "BTC Bonds" offer a compliant channel to gain BTC exposure while maintaining the security of Treasury bonds. Approximately 80% of the "BTC Bonds" would be absorbed by institutional investors and foreign buyers, with the remaining 20% issued to American households.

Implementation Roadmap and Risk Considerations

The plan includes a three-phase implementation strategy: a pilot project of $5 to $10 billion, a legislative expansion phase, and full integration into the Treasury's standard issuance schedule.

The plan also includes risk management protocols to address risks related to BTC price volatility, market trading, operational security, and regulatory classification. To mitigate market disruption, the government would acquire the $200 billion in BTC through periodic fixed investments and diversified trading channels.

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

The proposed $200 billion BTC purchase plan would fund a strategic BTC reserve, established by President Donald Trump through an executive order in March 2025.

The order classifies BTC as "digital gold" and authorizes budget-neutral strategies to expand national holdings. The initial reserve would be funded through the confiscation of recovered BTC. The "BTC Bonds" plan directly builds on this directive, expanding the reserve size through public bond issuance without relying on additional tax revenue.

The policy brief notes that the reserve would serve as a store of value, with assets securely custodied and not engaged in active trading. Custody arrangements include multisignature cold storage and dedicated security infrastructure managed by a specialized Treasury unit.

Long-Term Impact

Simulations based on BTC's historical performance suggest that the BTC reserve could accumulate trillions of dollars in value.

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

Even at the 10th percentile of BTC growth rates, the value of the government's reserve could surpass the current U.S. gold reserve.

The BTC Bonds plan is seen as an alternative to traditional austerity measures or tax-based debt solutions. It achieves long-term fiscal stability through asset appreciation and has the potential to reduce or offset future federal debt obligations.

The document also notes that the proposal would position the U.S. at the forefront of integrating BTC into global sovereign finance, with far-reaching implications for financial resilience, debt management, and the development of digital asset markets.

According to a policy framework released by the BTC Policy Institute, the U.S. Treasury could potentially issue $2 trillion in "BTC-Enhanced Treasury Bonds" (hereinafter referred to as "BTC Bonds") and allocate $200 billion to purchase BTC.

This structure of the "BTC Bonds" is designed to refinance a portion of the $14 trillion in federal debt maturing over the next three years.

Each bond would allocate 90% of its proceeds to traditional government financing and 10% to purchasing BTC, thereby creating a strategic BTC reserve without directly using taxpayer funds.

Low-Cost BTC Investment Exposure

The proposed "BTC Bonds" would have an annual interest rate of 1%, significantly lower than the current approximate 4.5% yield on 10-year Treasury notes. In exchange for accepting a lower fixed return, investors would receive appreciation gains linked to BTC through a structured payment mechanism at bond maturity.

This payment would include full principal repayment, fixed interest, and a portion of gains linked to BTC. Within the annualized compound return threshold, investors would receive 100% of the BTC appreciation gains. For any gains exceeding the threshold, investors would receive 50% of the additional gains, with the remainder retained by the government.

Performance-based modeling shows that even if the BTC price remains flat over the 10-year period, the U.S. could still save approximately $354 billion in present value, after subtracting the $200 billion allocated for BTC from the projected interest savings of $554.4 billion.

The framework emphasizes that if BTC prices rise according to historical medians, the plan could offset a significant portion of the national debt by 2045.

Additional Features of BTC Bonds

Moreover, the "BTC Bonds" proposal includes tax-exempt treatment for interest payments and gains linked to BTC, making it a retail investor-friendly savings product. It is projected that 132 million American households would participate, with an average investment per household potentially reaching $3,025.

The proposal also outlines a legislative and regulatory framework for incorporating tax incentives into law, to be managed by the Treasury Department and the Internal Revenue Service (IRS).

For institutional investors, "BTC Bonds" offer a compliant channel to gain BTC exposure while maintaining the security of Treasury bonds. Approximately 80% of the "BTC Bonds" would be absorbed by institutional investors and foreign buyers, with the remaining 20% issued to American households.

Implementation Roadmap and Risk Considerations

The plan includes a three-phase implementation strategy: a pilot project of $5 to $10 billion, a legislative expansion phase, and full integration into the Treasury's standard issuance schedule.

The plan also includes risk management protocols to address risks related to BTC price volatility, market trading, operational security, and regulatory classification. To mitigate market disruption, the government would acquire the $200 billion in BTC through periodic fixed investments and diversified trading channels.

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

The proposed $200 billion BTC purchase plan would fund a strategic BTC reserve, established by President Donald Trump through an executive order in March 2025.

The order classifies BTC as "digital gold" and authorizes budget-neutral strategies to expand national holdings. The initial reserve would be funded through the confiscation of recovered BTC. The "BTC Bonds" plan directly builds on this directive, expanding the reserve size through public bond issuance without relying on additional tax revenue.

The policy brief notes that the reserve would serve as a store of value, with assets securely custodied and not engaged in active trading. Custody arrangements include multisignature cold storage and dedicated security infrastructure managed by a specialized Treasury unit.

Long-Term Impact

Simulations based on BTC's historical performance suggest that the BTC reserve could accumulate trillions of dollars in value.

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

Even at the 10th percentile of BTC growth rates, the value of the government's reserve could surpass the current U.S. gold reserve.

The BTC Bonds plan is seen as an alternative to traditional austerity measures or tax-based debt solutions. It achieves long-term fiscal stability through asset appreciation and has the potential to reduce or offset future federal debt obligations.

The document also notes that the proposal would position the U.S. at the forefront of integrating BTC into global sovereign finance, with far-reaching implications for financial resilience, debt management, and the development of digital asset markets.