In a significant week for U.S. cryptocurrency policy, two major developments have emerged from Washington, D.C., highlighting the government's evolving but cautious stance on digital assets. First, Republican lawmakers, led by Senator Cynthia Lummis of Wyoming, have launched a bold legislative initiative urging the Treasury Department to purchase Bitcoin as part of the nation's strategic reserves. Concurrently, Treasury Secretary Bessent has definitively stated the department possesses no legal authority to execute a bailout of the Bitcoin market.
The proposal for Bitcoin treasury purchases, reported by Walter Bloomberg, represents the most direct legislative effort yet to incorporate digital assets into U.S. reserve strategy. Senator Lummis has specifically suggested using a portion of the nation's approximately $11 billion in gold reserves, stored at Fort Knox and other locations, to acquire Bitcoin. This initiative, which has gained momentum with increased bipartisan interest, argues that digital assets represent a natural evolution of reserve management, offering strategic positioning in emerging markets and a potential hedge against currency devaluation.
Financial experts, like Stanford University's Dr. Michael Carter, suggest any initial allocation would likely be cautious, perhaps 1-2% of total reserves. However, the proposal faces substantial hurdles, including concerns over Bitcoin's price volatility, the need for sophisticated federal-level cybersecurity and custody solutions, and the development of new accounting standards for digital assets. The proposal would require congressional authorization and executive branch coordination before any implementation.
In a separate but related development, Treasury Secretary Bessent, during a congressional hearing on March 15, 2025, provided a crucial clarification. In response to questioning from Senator Sherman, Bessent confirmed the Treasury Department lacks the statutory authority to use taxpayer funds to stabilize or support the Bitcoin market. This declaration, also first reported by Walter Bloomberg, extinguishes any notion of a federal Bitcoin bailout and reinforces a separation between traditional fiscal policy tools and the decentralized digital asset ecosystem.
Secretary Bessent's position is rooted in the department's enabling legislation. Historical emergency tools like the Exchange Stabilization Fund are designed for traditional currency and sovereign debt markets. Experts, including Dr. Anya Sharma of Georgetown University, note that extending these powers would require explicit new legislation from Congress, for which there is currently little political appetite. This clarity aims to reduce speculative "moral hazard" where investors might take excessive risks expecting a government rescue.
While closing the door on bailouts, the Treasury continues to engage on digital asset policy through other channels, focusing on stablecoin oversight, anti-money laundering compliance, and international regulatory coordination. The Republican reserve proposal and the Treasury's bailout clarification together paint a picture of a U.S. government cautiously defining the boundaries of its relationship with cryptocurrencies, exploring strategic adoption while firmly ruling out market intervention.
