Source: Blockchain Knight

According to a framework released by the BTC Institute, the U.S. Treasury Department may allocate $200 billion to purchase BTC through the proposed issuance of $2 trillion "BTC Enhanced Treasury Bonds" (hereinafter referred to as "BTC Bonds").

This "BTC bond" structure is intended to refinance a portion of the $14 trillion federal debt due in the next three years.

Each bond will use 90% of the proceeds to traditional financing and 10% to purchase BTC, so that a strategic BTC reserve can be created without directly using taxpayer funds.

The proposed "BTC bonds" have an annual interest rate of 1%, much lower than the current 10-year Treasury yield of about 4.5%. In exchange for accepting lower fixed returns, investors will obtain value-added returns linked to BTC through a structured payment mechanism when the bond matures.

This payment will include full principal repayment, fixed interest, and the revenue portion linked to BTC. Within the annualized compound yield threshold, investors can obtain 100% of the value-added income of BTC. The investor can obtain 50% of the additional income after the threshold, and the rest is retained.

Performance modeling based on earnings performance shows that even if BTC prices remain stable over the 10-year period, subtracting $200 billion of BTC allocation funds from the estimated $554.4 billion interest savings, the United States can still save about $354 billion in its present value.

The framework emphasizes that if BTC prices rise at historical median, the plan may offset a significant portion of Treasury bonds by 2045.

In addition, the "BTC Bond" proposal also includes tax-free treatment for interest payments and BTC-linked earnings, making it a savings product that is friendly to retail investors. It is estimated that US$132 million will participate, and the average investment per household may reach US$3,025.

The proposal also outlines the legislative and regulatory framework for the inclusion of tax incentives in the legal provisions and is managed by the Ministry of Finance and the Inland Revenue Service (IRS).

For institutional investors, "BTC bonds" provide a compliant channel to gain BTC exposure while maintaining Treasury bonds security. About 80% of the "BTC bonds" will be absorbed by institutional investors and foreign buyers, and the remaining 20% ​​will be sold to the U.S. Court.

The plan includes three phases of implementation strategies: a pilot project of $5 billion to $10 billion, a legislative expansion phase, and full inclusion into the Ministry of Finance’s standard issuance agenda.

The plan includes a risk management agreement to deal with risks in BTC price fluctuations, market transactions, operational security and regulatory classification. In order to reduce market interference, US$200 billion of BTC will be acquired through installment fixed investment and diversified trading channels.

The brief also details theRegulatory standards and coordination with federal regulators to clarify the classification of these bonds under securities, commodity and tax laws.

The proposed $200 billion BTC purchase program will fund strategic BTC reserves, which were established by President Donald Trump in March 2025.

This command classifies BTC as “digital gold” and authorizes the development of budget neutral strategies to expand holdings. The initial reserve will be funded by forfeited BTC. The “BTC Bonds” program is based directly on this directive to expand reserves through public bond issuance without relying on additional tax revenue.

The briefing states that the reserve will be used as a means of value storage, and the assets will be properly custodian and will not participate in active transactions. The custody program includes multi-signature cold storage and a dedicated security infrastructure managed by a dedicated Ministry of Finance unit.

Simulated scenarios based on BTC historical performance suggest that BTC reserves may accumulate trillions of dollars in value.

Assuming the historical median compound annual growth rate of 53%, by 2035, the value of BTC holdings in reserves may exceed $14 trillion, of which $6.5 trillion will be retained.

Even if the BTC growth rate is in the 10th percentile, the value of the reserves held may exceed the current U.S. gold reserves.

BTC bond schemes are seen as alternatives to traditional austerity or tax-based debt solutions. It achieves long-term fiscal stability through asset appreciation, which has the potential to reduce or offset future federal debt obligations.

The document also pointed out that the proposal will give the United States a leading position in integrating BTC in global sovereign finance, with far-reaching impact on financial resilience, debt management and the development of the digital asset market.