Philippine Lawmaker Proposes Strategic Bitcoin Reserve to Tackle National Debt

A Philippine lawmaker recently introduced a bill that aims to set up a government-run Bitcoin reserve to help cut the country's towering national debt. The “Strategic Bitcoin Reserve Act” filed by Representative Miguel Luis R. Villafuerte would mandate the Bangko Sentral ng Pilipinas (BSP) to buy 2,000 BTC each year for five years, totalling 10,000 BTC. The holdings would be locked for 20 years and could only be sold or swapped to pay down national debt. 

Bitcoin Reserve Proposed as National Debt Reaches $285 Billion

"The State shall promote and maintain economic prowess, including monetary stability and the convertibility of the peso, especially in times of crisis. With the increasing role of cryptocurrency in the world's financial system, it is imperative to enact measures aimed at diversifying our assets to ensure financial security," the bill reads.

Drawing inspiration from the commodity style reserves, such as the US Strategic Petroleum Reserve and Canada's maple syrup stockpile, Villafuerte said the reserve would focus on economic security by diversifying assets. 

The central bank would create cold storage facilities nationwide under the bill, and audits would be carried out every quarter using cryptographic attestations that were confirmed by impartial third parties. No more than 10 percent of the reserve could be sold in any two years following the 20-year lock-up. Additionally, assets that are airdropped or forked would be kept for a minimum of five years. The law also states that private Bitcoin ownership will remain unaffected and that citizens holding will not be subject to seizure. 

The Philippines is not the first country to consider treating Bitcoin as a strategic reserve asset. Earlier this year, US President Donald Trump introduced the national Bitcoin reserve through asset forfeitures, describing it as “digital gold”. 

On the other hand, the UK Treasury pointed out that a national crypto reserve is inappropriate, while South Korea's central bank warned that Bitcoin's high volatility and a very little alignment with the IMF make it an unsuitable option. 

India has also been on the fence with the issue. Polygon co-founder Sandeep Nailwal and Avail co-founder Anurag Arjun emphasised that a small portion, around 1-2 percent of national reserves, can be allocated to Bitcoin, but regulators remain cautious. 

The Philippines could be one of the first countries in Asia to institutionalise Bitcoin reserves, provided the bill is passed. It could set a narrative that could lead to growth in crypto adoption.