House Financial Services Committee Passes Strategic Bitcoin Reserve Bill
On September 16 local time, the U.S. House Financial Services Committee passed the revised H.R. 8957 bill, known as the American Reserve Modernization Act (ARMA), through a voice vote. This bill aims to formally enshrine the federal "strategic Bitcoin reserve" into law, and it will subsequently be submitted for a full House vote, which has not yet been scheduled.
The bill was jointly introduced on May 21 by Republican Congressman Nick Begich from Alaska and Democratic Congressman Jared Golden from Maine, garnering support from over 20 bipartisan lawmakers. This marks the first time the concept of a "strategic Bitcoin reserve" has entered a binding legislative process, as it was previously established only by Executive Order 14233 signed by Trump earlier this year, which could be revoked by future presidents. Once codified into law, it would require Congressional action to overturn.
According to the bill, approximately 198,000 Bitcoins currently held by the federal government through criminal and civil forfeiture will be transferred to a strategic reserve managed by the Treasury Department. These Bitcoins will come solely from judicial forfeiture, not from public market purchases. The Treasury must establish supporting secure storage facilities within 180 days of the bill's enactment. The Bitcoins in the reserve must be held for at least 20 years, during which they cannot be sold, swapped, or traded; any future sales must follow an independent rule-making process and be publicly disclosed.
The most significant institutional change in the bill is the disposal path for seized assets: previously, Bitcoins seized by the Department of Justice and federal law enforcement were typically auctioned off by the U.S. Marshals Service. The new regulations will connect this forfeiture channel directly to the strategic reserve, eliminating public auctions. The bill also establishes a "digital asset reserve" independent of Bitcoin to accommodate other seized cryptocurrencies like Ethereum, Solana, XRP, and Cardano. Proceeds from the sale of these assets can be used to purchase additional Bitcoins or pay down federal debt, with the bill explicitly stating that the entire mechanism must not utilize new taxpayer funds and must remain budget-neutral.
An alternative amendment submitted by House Digital Assets Subcommittee Chairman Bryan Steil made several adjustments to the original bill: the 20-year lock-up period will now be calculated uniformly from the bill's enactment date (rather than separately for each Bitcoin deposited); the audit frequency has changed from quarterly reports to annual independent audits; the lock-up resale period for newly acquired assets from forks or airdrops has been reduced from 5 years to 1 year; and new provisions clarify that the federal government cannot seize or restrict individuals' legally compliant holdings of Bitcoin.
From a funding and market structure perspective, the committee's vote will not immediately change the market supply of Bitcoin—the Treasury is not currently selling its holdings, and the bill still needs to pass a full House vote, Senate approval, and presidential signature. Currently, there is no corresponding version of the bill in the Senate; one possible path is to incorporate the reserve provisions into the year-end National Defense Authorization Act. The complementary "BITCOIN Act" (S.954/H.R.2032), which would allow the government to actively purchase Bitcoin (200,000 additional Bitcoins each year for five consecutive years), remains stalled in both chambers of Congress and has not yet been scheduled for hearings. The real marginal impact on prices will come once the bill is finalized, as it will permanently lock up nearly 200,000 Bitcoins' market liquidity, reducing potential selling pressure and providing structural benefits to long-term holders. In the short-term trading aspect, on the day of the committee vote, the market was more focused on macro variables such as the Federal Reserve's interest rate path rather than a procedural vote by the committee.
During the public discussion of the bill text, the spot price of Bitcoin traded around $77,100.
Source: Public Information
ABAB AI Insight
The U.S. government's handling of seized Bitcoins has a clear historical trajectory: for a long time, the default practice of the Department of Justice and the U.S. Marshals Service has been to publicly auction off seized Bitcoins, with the most notable being the multiple auctions of Bitcoins seized from the "Silk Road" case, where early buyers received returns far exceeding their initial investments. Trump's Executive Order 14233 earlier this year first classified the federally held seized Bitcoins as "strategic reserves" rather than assets for sale, and the ARMA bill is Congress's attempt to solidify this administrative decision into written law, preventing future governments from reverting to the "auction liquidation" approach.
The funding path designed in the bill is quite clever—rather than adding new fiscal appropriations, it directly transfers seized assets that would have gone to the auction market into a locked reserve managed by the Treasury. It also establishes an independent "digital asset reserve" to handle other seized cryptocurrencies like Ethereum and Solana, with proceeds from sales flowing back to purchase additional Bitcoins or pay down national debt, creating a closed-loop funding mechanism of "seized asset internal circulation, without using a penny of taxpayer money." In contrast, the still-stalled BITCOIN Act in Congress would authorize the Treasury to actively purchase Bitcoins each year for five consecutive years, representing an upgrade from "passive accumulation through seizures" to "active market purchases," but it has not yet garnered enough bipartisan support to enter hearings.
This can be compared to the actions of multiple central banks in recent years to increase their gold holdings and reclassify gold as a strategic reserve asset—essentially a sovereign-level repricing of "inflation-resistant, credit-risk-free assets." It can also be likened to previous attempts by some countries to include Bitcoin in their sovereign asset balance sheets, but the U.S. is doing so through passive accumulation via seizures, then legislating to lock it in, rather than through active market purchases. In terms of industry positioning, global sovereign Bitcoin reserves are gradually moving from "experimental holdings by a few countries" to a phase where "traditional financial powers institutionalize it through legislative processes."
Structural judgment: This is a regulatory change. Mechanically, the essence of this event is not a change in the scale of funds—there are currently no new purchases, only a re-legislation of the disposal method for existing assets—but rather a transfer of regulatory power structure, converting the "strategic reserve" decision, which could have been reversed at any time by the executive branch, into a written law requiring participation from both houses of Congress and the president for amendments, significantly raising the institutional cost for future governments to reverse this policy. This "shift from administrative discretion to legislative solidification" in regulatory change objectively provides stronger institutional certainty for Bitcoin's long-term position within the U.S. sovereign asset system.
ABAB News · Cognitive Law
The certainty of institutional locking is worth more than the price itself.
Executive orders are promises; legislation is a contract.
Auction liquidation is a thing of the past; locking is the new narrative.