The Bitcoin Policy Institute, an organization dedicated to exploring the future of finance, has recently suggested that the United States should consider adopting Bitcoin-based Treasury Bonds, known as “BitBonds.” This unique financial instrument could help achieve several key objectives, including the execution of President Trump’s Strategic Bitcoin Reserve plan. The proposal was jointly written by Andrew Hohns, the founder and CEO of Newmarket Capital and Battery Finance, and Matthew Pines, the Executive Director of the Bitcoin Policy Institute.
The policy brief outlines how BitBonds could be a timely solution to implement Trump’s directive, reduce the interest on US Treasury bonds, and increase the country’s Bitcoin assets. On March 6, Trump signed an executive order to establish a US Strategic Bitcoin Reserve, created from the roughly 200,000 BTC (currently worth around $17 billion) held by the federal government following criminal or civil proceedings. The reserve is estimated to hold around 103,500 BTC at launch.
Trump’s order also instructed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to devise budget-neutral means of acquiring more Bitcoin without adding extra costs for American taxpayers. The Bitcoin Policy Institute is committed to delivering research and analysis that inform sound decisions about Bitcoin and other monetary networks. Trump’s executive order aligns well with the policy recommendations previously made by the institute.
The proposed BitBonds would offer investors a fixed 1% annual interest in US dollars, significantly lower than the standard Treasury bond’s 4.5% rate. Ninety percent of the BitBond sales would be allocated to general government funding, while 10% would be used to buy Bitcoin for the reserve. The government would also keep a portion of any Bitcoin gains.
The Bitcoin Policy Institute also views BitBonds as a potential solution to the US government’s broader fiscal challenges, particularly the need to refinance its trillions of dollars in debt. “The US confronts an unprecedented fiscal challenge with about $9.3 trillion of federal debt set to mature within the next year. This tremendous refinancing requirement, along with market interest rates close to 4.5%, results in significant ongoing costs to service this debt,” the authors noted.
According to the authors, BitBonds could offer “immediate fiscal relief” and could save the government billions annually, with estimates of up to $700 billion in savings over a decade. They also suggested additional benefits such as a significant reduction in the national debt, expansion of the Strategic Bitcoin Reserve without additional costs to taxpayers, and offering tax-advantaged returns, hence democratizing access to Bitcoin’s potential growth.
