The bitcoin reserve initiative proposed by a Philippine lawmaker marks a bold move to tackle the country’s mounting debt through cryptocurrency. Representative Miguel Luis R. Villafuerte has introduced a bill, known as the Strategic Bitcoin Reserve Act, aiming to diversify national assets by leveraging the long-term potential of bitcoin (BTC).

How the Strategic Bitcoin Reserve Program Works

The bill tasks the Bangko Sentral ng Pilipinas (BSP), the country’s central bank, with the responsibility of acquiring 2,000 BTC annually over the next five years, amounting to a total of 10,000 BTC. Once acquired, these holdings would remain inaccessible for two decades, except if they are sold or swapped specifically to pay off government debt.

Such a move would place the Philippines among a small group of nations directly integrating cryptocurrency into sovereign financial policy. Villafuerte’s legislation seeks to emulate models like the Strategic Petroleum Reserve in the United States and Canada’s maple syrup stockpile by treating bitcoin as a long-term strategic commodity.

Purpose and Restrictions of the Bitcoin Reserve

The proposed reserve is designed with several strict guidelines. For instance, after the 20-year lock-in period, the central bank governor may not release more than 10% of the BTC reserves over any given two-year period. This design ensures that the reserve remains a stable and long-term asset base.

According to Villafuerte, the Philippines must maintain economic resilience through diversified assets, especially at a time when digital currencies play an increasingly significant role in global finance. Referencing the U.S. model of strategic reserves, he emphasizes the necessity of protecting financial sovereignty and stability.

Infrastructure and Oversight Through Cold Storage

To secure the digital assets, the legislation calls for geographically distributed cold-storage vaults located across the nation. These will not only be physically secure but will also undergo a quarterly audit process. Verification will be carried out using public cryptographic attestations and independent external audits to ensure transparency.

Philippine national debt has risen to $285 billion, approximately 60% of GDP, as reported in January 2024.

Asset Management Rules and Private Ownership Protections

Additionally, the bill outlines specific rules for handling digital derivatives. Any cryptocurrency forks or airdropped assets that arise from the reserve’s bitcoin holdings must be retained for a minimum of five years.

To reassure the public, the bill clearly states that it does not interfere with or limit private ownership of bitcoin. Citizens’ crypto assets would remain untouched and exempt from any form of government seizure. The proposed policy, while bold, seeks to establish a clear boundary between state reserves and personal digital wealth.

Villafuerte’s proposal arrives at a time when the nation’s national debt has ballooned to approximately $285 billion, equivalent to 60% of its gross domestic product. The measured, long-term framework reflects an effort to incorporate cryptocurrency into national economic planning while remaining conservative in its asset utilization.

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For more details on the proposed bill, you can consult the official document.