Philippines Congressman Proposes 10,000 BTC Strategic Bitcoin Reserve

A Congressman in the Philippines has introduced a proposal to establish a Strategic Bitcoin Reserve that would see the country’s central bank, the Bangko Sentral ng Pilipinas (BSP), purchase up to 10,000 BTC. 

Submitted as bill number 421 by Congressman Miguel Luis Villafuerte, the proposed “Strategic Bitcoin Reserve Act” mandates the purchase of 2,000 BTC yearly over a five-year period.

That BTC will be locked up for 20 years as part of a “holding period.”  

“During the minimum holding period, no Bitcoin held in the Strategic Bitcoin Reserve may be sold, swapped, auctioned, encumbered, or otherwise disposed of for any purpose other than retiring outstanding government debt instruments,” Villafuerte wrote in the bill.

If enacted, the bill would make the Philippines one of the first countries in Asia to legislate a sovereign strategic BTC reserve.

Bitcoin Can Provide Financial Stability

In the bill, the Congressman said that “BTC’s growth has outpaced all other asset classes, with a compound annual growth rate of about 40% over a five-year period,” adding that the crypto has joined “the ranks of traditional assets such as cash, gold, and real estate.” 

The proposed bill follows a January report from the country’s Bureau of the Treasury that said national debt hit $285 billion, which equated to 60% of the country’s gross domestic product (GDP). 

Villafuerte subsequently argued that it is vital “that the Philippines stockpile strategic assets such as BTC to serve important national interests such as providing financial stability, among others.”

“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,” he wrote. 

The Congressman added that the Philippines can “promote and maintain economic prowess, including monetary stability and the convertibility of the peso, especially in times of crisis,” by stockpiling BTC. 

In order to securely store the Bitcoin in the proposed reserve, Villafuerte said the central bank will have to establish “a decentralized network of secure Bitcoin storage facilities across the country” that will safeguard the keys to the country’s holdings. 

Those locations will also be “geographically dispersed throughout the Philippines.” This is to reduce the risk of “simultaneous compromise,” while simultaneously enhancing the resilience of the reserve.

The central bank will be responsible for the “ongoing monitoring and auditing” of the reserve’s holdings as well. Quarterly reports on the reserve’s assets will also have to be made publicly available. These reports will provide “detailed information” on the reserve’s total holdings and any transactions, and also need to demonstrate control of the reserve’s private keys.

One year before the 20-year holding period is over, the central bank will have to submit recommendations to Congress on whether to continue “voluntarily” holding the Bitcoin, or “allow for the gradual and controlled release of a portion of the holdings,” according to the proposed bill.

If the option to gradually sell the reserve’s holdings is chosen, then the central bank will not be able to sell more than 10% of the assets “during any 2-year period.” 

More Countries Turning To Bitcoin 

In addition to the US, the Congressman noted that BTC has also gained traction in other regions of the world as well. 

Those include El Salvador, which has already adopted BTC as legal tender and has started to purchase the crypto to hold in its own reserve. Brazil has also introduced its own sovereign strategic BTC reserve known as RESBit. 

Meanwhile, Switzerland is considering a BTC reserve alongside gold, while Germany’s former Finance Minister Christian Lindner has suggested the European Central Bank and the Bundesbank decrease their reliance on the dollar and consider BTC, Villafuerte wrote in the proposal.

Similar developments have happened in Hong Kong, Russia, Poland and Thailand. 

As other governments start to buy BTC, Villafuerte predicted that it would likely “set off a wave of BTC” accumulation around the world. 

Villafuerte then went on to say that BTC’s fixed supply of 21 million coins, could potentially limit the crypto’s devaluation. 

His prediction comes after Bitcoin achieved a new all-time high (ATH) at $124,457.12 earlier this month. The crypto has since retraced over 10%.

BTC price chart (Source: CoinMarketCap)