The following policy brief is co-authored by Andrew Hohns and Matthew Pines and can be accessed here.
The United States faces an unprecedented fiscal challenge with approximately $9.3 trillion of federal debt maturing within the next 12 months. This substantial refinancing requirement, combined with prevailing market interest rates approaching 4.5%, creates significant ongoing costs to service this debt. These costs place an extraordinary burden on taxpayers and substantially constrain the government's fiscal flexibility and economic growth potential.
Building on President Donald J. Trump's March 6, 2025 Executive Order establishing the Strategic Bitcoin Reserve, this white paper proposes that the United States adopt Bitcoin-Enhanced US Treasury Bonds ("₿ Bonds” or “BitBonds") as an innovative fiscal tool to address multiple critical objectives. The Executive Order recognized bitcoin as a strategic reserve asset—akin to digital gold—and authorized the Secretaries of Treasury and Commerce to develop budget-neutral strategies for acquiring additional bitcoin without imposing costs on American taxpayers. The BitBonds program represents a direct implementation of this directive.
The BitBonds framework is engineered to accomplish four critical objectives:
1. Substantially reduce the interest burden on Treasury bonds, generating immediate fiscal relief;
2. Expand the Strategic Bitcoin Reserve at no additional cost to taxpayers, rapidly building our nation’s bitcoin holdings;
3. Create a tax-advantaged savings vehicle for American families that provides both security and growth potential; and
4. Develop a viable pathway to defease a substantial portion of the federal debt over time through asset appreciation rather than increased taxation or reduced spending.
The proposed structure allocates 90% of bond proceeds to conventional government funding operations and 10% to bitcoin acquisition. This balanced approach maintains the traditional stability of Treasury instruments while providing strategic exposure to the growth potential of bitcoin. By leveraging America's position as a global financial and technology leader, BitBonds offer multiple mechanisms to reduce the overall debt burden while strengthening the nation's strategic position in the evolving monetary landscape. BitBonds leverage the administration's leadership in positioning America as the world’s "bitcoin superpower."
Detailed financial analysis indicates that implementation of the BitBonds program at the proposed scale of $2 trillion (approximately 20% of 2025 refinancing needs) could generate annual interest savings of $70 billion compared to conventional Treasury issuance. Over a ten-year period, this represents nominal savings of $700 billion and a present value of $554.4 billion. After accounting for the initial bitcoin purchase of $200 billion, the program delivers net taxpayer savings of $354.4 billion even if bitcoin prices remain static. When considering historical bitcoin performance metrics, the government's share of appreciation could, under median growth scenarios, generate sufficient returns to substantially reduce or even eliminate the federal debt burden for future generations of Americans.
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