- Standard Chartered suggests selling U.S. gold reserves to fund Bitcoin acquisitions.
- The U.S. holds $758B in gold, which could be used for a budget-neutral Bitcoin reserve.
- The Treasury’s $39B Exchange Stabilization Fund is another option for Bitcoin purchases.
Standard Chartered has proposed that the U.S. government could retrieve funding for its newly launched Strategic Bitcoin Reserve (SBR) by selling part of its current gold reserves without increasing financial strain on taxpayers. According to bank declarations this method constitutes “budget-neutral” because it prevents financial strain on taxpayers while expanding national Bitcoin control.
The proposal follows President Donald Trump’s recent signing of an executive order creating the SBR. The new directive mandates that all future Bitcoin acquisitions for the reserve must follow budget-neutral strategies. Standard Chartered’s Geoff Kendrick highlights that selling gold, which is currently valued at approximately $758 billion, could provide the necessary funds without affecting the federal budget.
Gold Reserves and Bitcoin Acquisitions
The U.S. government maintains an extensive reserve of gold totalling 8,133.46 tons which is vital to Kendrick’s plan. The government wants to increase its digital asset portfolio through Bitcoin purchases by utilizing its existing gold reserves as a funding source.
Standard Chartered suggests using government gold reserves to purchase Bitcoin while avoiding new expenditures. Standard Chartered proposes to execute these purchases through the existing financial framework without creating new budgetary requirements.
The U.S. government’s gold reserves are one of its most valuable assets, but in times of economic uncertainty, they may become a source of funding for Bitcoin investments. Kendrick explained that this shift would represent a substantial departure from standard gold-centered strategies yet proved advantageous since Bitcoin currently commands global attention.
The cryptocurrency’s value ranged between $94,770 and $82,681 within seven days, according to CoinGecko. At present, Bitcoin is trading at $85,925, showing less than a 1% increase over the past week.
Potential Alternatives for Funding Bitcoin Reserve Purchases
Kendrick showed interest in alternative funding strategies to acquire Bitcoin, including utilizing resources from the Treasury Exchange Stabilization Fund (ESF). With a $39 billion fund stabilizes the U.S. dollar when traded in foreign currency markets. Using the ESF funds to acquire Bitcoin would represent an unexpected budgetary decision but could enable the government to achieve its Bitcoin targets through current fiscal resources.
The Bitcoin Act of 2024 is proposed legislation suggesting the U.S. Treasury should buy Bitcoin over a five-year period. If approved the bill would establish a budget-neutral framework for acquiring Bitcoin Reserve while adhering to governing budget regulations.
Data from the US Treasury shows that the department currently holds over 258.6 million troy ounces of gold, valued at over $10.9 billion as of Feb. 28. The Treasury’s convertible foreign currency reserves, as of Jan. 31, total over $35 billion.
The proposed strategic approaches encounter multiple barriers that prevent their easy execution. Some proposed solutions require U.S. government approval from Congress because they involve gold sales or ESF utilization for Bitcoin Reserve procurements. Barriers exist that might hold up both the Strategic Bitcoin Reserve’s deployment and its acquisition plans.