Bitcoin Strategic Reserve, Function and Benefits

Table of Contents

About Strategic Reserve

A strategic reserve is a stock of a critical resource which can be released at times of crisis or supply disruptions.
Eg. U.S. Strategic Petroleum Reserve, the world’s largest supply of emergency crude oil, which was created by an act of Congress in 1975 after a 1973-74 Arab oil embargo throttled the U.S. economy.

Strategic Reserves of Other Countries

India’s Strategic Petroleum Reserves (SPRs): Collection of oil stockpiles which the government can use to respond to supply disruptions in the global oil market.
- India’s SPRs have a total capacity of 5.33 million metric tonnes (MMT) of crude oil.
- Locations: Visakhapatnam, Mangalore and Padur.
- Under Construction: Chandikhol (Odisha) & Padur-II (Karnataka)
Canada: It has the world’s only strategic reserve of maple syrup.
China: It also has strategic reserves of petroleum, metals, grains and even pork products.

Establishment: Currently unclear if it would require executive powers or Congress approval. Some suggest an executive order to manage bitcoin through the S. Treasury’s Exchange Stabilization Fund.
Composition of Reserve: Could include bitcoin seized from criminal actors by the government. That stands at around 200,000 tokens, worth about $21 billion at the current price.

Global Market Dominance: It will increase U.S. control over the global bitcoin market, especially against competitors like China.
Economic Advantage: Could reduce U.S. fiscal deficit and strengthen the U.S. dollar.

Volatile Nature: Bitcoin’s value is uncertain due to volatility and lack of intrinsic use.
Security: Vulnerability to cyber-attacks and market fluctuations.