US Lawmakers Propose 20-Year Bitcoin Reserve Plan to Curb Government Sales

U.S. lawmakers have introduced draft legislation that would shift the federal government’s posture on Bitcoin (BTC) from routine liquidation to long-term stewardship—an approach that, if enacted, could materially reduce the market’s overhang from potential government sales and further embed Bitcoin in Washington’s strategic asset debate.

According to a recent research note from MEXC Ventures, the proposed “American Reserve Modernization Act (ARMA),” introduced on May 21, 2026 (ET), would consolidate Bitcoin currently held across federal agencies into a Treasury-managed ‘Federal Bitcoin Reserve’ and, as a default rule, prohibit sales for 20 years. The structure represents a sharp break from prior practice, where seized or forfeited Bitcoin was frequently auctioned or sold into the market.

The bill was introduced on a bipartisan basis by Rep. Nick Begich and Rep. Jared Golden, with 17 members signing on—an unusual signal in a deeply polarized Congress. While the proposal faces a long legislative path through committee review, House and Senate votes, and eventual presidential signature, the introduction alone has been read by market participants as a meaningful policy marker: the U.S. government may be moving toward treating Bitcoin as a strategic reserve asset rather than a disposable windfall.

At the core of ARMA is a mandatory transfer framework. Bitcoin acquired by federal entities through investigations, seizures, forfeitures, or confiscations would no longer be slated for disposition; instead, it would be centralized under the Treasury as part of a dedicated reserve. MEXC Ventures notes that other digital assets—such as Ethereum (ETH)—would be handled separately under a distinct ‘digital strategic assets’ regime, implying a hierarchy in which Bitcoin is categorized as a standalone, priority reserve asset while other cryptocurrencies are managed with more flexible rules.

The distinction matters because the federal government’s historical sales have repeatedly served as a source of supply anxiety. In prior high-profile cases tied to drug enforcement, major hacks, and fraud investigations, the U.S. government disposed of sizeable Bitcoin holdings via public auctions or sales. Each event tended to revive fears of sudden supply hitting the market, contributing to volatility and complicating sentiment around broader crypto adoption. ARMA is explicitly designed to neutralize that dynamic by turning government-held Bitcoin into a long-duration holding.

The bill’s most stringent provision is the 20-year ‘no-sale’ principle for Bitcoin placed into the reserve. Sales would be allowed only in narrowly defined exceptions—such as purposes connected to national debt repayment—rather than routine budget management. In effect, the proposal would restrict the government from using Bitcoin as a discretionary fiscal tool based on price cycles or short-term financing needs. Supporters would likely frame that rigidity as a feature that reduces supply uncertainty; critics, however, are expected to argue it constrains fiscal flexibility and locks the Treasury into holding a highly volatile asset.

ARMA also attempts to build credibility through operational transparency. MEXC Ventures highlights quarterly ‘proof-of-reserve’ reporting requirements that would disclose holdings and compel independent third-party audits, while leaving congressional oversight intact. Compared with the typically opaque management of certain state assets, the digital nature of cryptocurrencies—combined with potential on-chain verifiability—could push government reserve disclosure toward a higher standard of public accountability than investors are accustomed to seeing.

Another notable feature is the bill’s explicit protection of personal ‘self-custody’ rights. The draft language would bar the federal government from prohibiting or restricting individuals from holding their own cryptocurrency in private wallets. That provision lands amid broader U.S. policy debates spanning exchange regulation, stablecoin oversight, and digital-asset market structure, and signals an effort to pair national reserve policy with protections for individual property rights and technological autonomy.

Politically, the proposal builds on earlier executive-branch momentum. The administration previously directed federal agencies via a 2025 executive order to examine the feasibility of constructing a national digital-asset reserve. But executive actions can be reversed by future administrations; ARMA seeks to elevate the concept into statutory law, which would make the framework durable and less dependent on shifting political priorities. For markets, that potential ‘policy permanence’ is often more consequential than short-term headlines.

Still, the road to enactment is uncertain. Congress is simultaneously weighing other digital-asset bills aimed at defining market structure and regulatory jurisdiction, creating inevitable competition for legislative attention. There is also ideological resistance to the premise of locking a volatile asset into the national balance sheet, even among policymakers who accept the ‘digital gold’ narrative. The 20-year sale restriction, in particular, may draw scrutiny as overly rigid for modern treasury management.

Even if ARMA does not pass in its current form, MEXC Ventures argues the effort is itself instructive: it reflects an evolving policy lens in which Bitcoin is increasingly discussed as a strategic asset rather than a purely speculative instrument. With its blueprint for a dedicated Bitcoin reserve, segregated treatment for non-Bitcoin digital assets, mandated audits and disclosures, and codified self-custody protections, the draft has already set terms for the next phase of U.S. digital-asset governance—one likely to influence how other jurisdictions frame their own approaches to Bitcoin institutionalization.