When President Donald Trump signed an government order establishing a Strategic Bitcoin Reserve (SBR), he ordered David Sacks to assemble a crew and plan to purchase bitcoin (BTC) for the nation.
Sacks’ high appointee, Govt Director of the President’s Council of Advisers Bo Hines, thinks one mechanism for purchasing BTC is promoting gold.
Hines referred to as the proposed transfer a “budget-neutral” option to purchase BTC.
The declare that the US ought to promote its gold sparked quick debate. Not solely does gold have over 5,000 years of historical past as a sovereign retailer of worth, the steel is a dominant asset on central bankers’ stability sheets.
Hines thinks the US could legally promote BTC by means of a minimum of three strategies.
The primary methodology is democratically clear: Congressional authorization. Within the US, Congress approves the federal finances and has constitutional authority to allocate sources.
One invoice amongst many that’s slowly working its manner by means of Congress, Senator Cynthia Lummis’ (R-Wyoming) Bitcoin Act of 2025, would require the US to acquire 1 million BTC. That invoice particularly requires the sale of gold to fund a considerable quantity of the purchases.
Shopping for bitcoin for the SBR with out Congressional authorization
Even within the absence of congressional authorization, Trump may try to say authority to promote gold to purchase BTC with out passing extra legal guidelines. For instance, a second methodology for the authorized acquisition of sovereign BTC is to reconstitute the US Change Stabilization Fund.
Part 10 of the US Gold Reserve Act of 1934 created the Change Stabilization Fund. On this fund, the US Treasury Secretary has the discretion to stabilize the worth of the greenback by dealing in overseas change markets, gold, and devices of credit score and securities.
Mechanically, the Change Stabilization Fund may promote gold for BTC utilizing this “instruments of credit” class. The Treasury may, for instance, promote gold to buy a declare on future BTC generated by US mining corporations. This transaction can be a mortgage or instrument of credit score denominated in BTC but permissible beneath the US Gold Reserve Act of 1934.
The treasury secretary may additionally work with different monetary establishments to accumulate bonds or notes denominated in BTC to accumulate de facto publicity to the asset itself.
Sure, the US authorities could legally promote gold for bitcoin
Though the Change Stabilization Fund has historically relied on gold and foreign currency echange to stabilize overseas change (FX) charges for the US greenback, Trump, Sacks, Hines, and others may attempt to persuade Treasury Secretary Scott Bessent that BTC deserves to affix that basket of currencies.
A 3rd methodology for the authorized switch of worth from gold to BTC is to leverage the US authorities’s unrealized positive aspects from revaluing its gold certificates. This accounting maneuver avoids bodily gold gross sales whereas capturing latent worth from many years of gold value appreciation.
Particularly, the US Treasury values round 8,000 tons of gold close to a 1973 statutory fee of $42 per ounce. By reissuing its gold certificates to mirror present market charges at $3,000 per ounce, the Treasury would acknowledge over $700 billion in positive aspects that may very well be used to accumulate BTC.
Regardless of which path the Trump administration chooses, there are apparent dangers to promoting gold for BTC, not the least of which is the crypto’s infamous volatility and proclivity for stomach-churning drawdowns.
Nevertheless, each Congress and the treasury secretary do possess a minimum of three avenues for acquiring BTC on behalf of the US authorities and its SBR.
