US proposes $2 trillion Bitcoin bonds to offset debt

The Bitcoin Policy Institute has proposed an innovative financial strategy involving the issuance of Bitcoin-enhanced (CRYPTO:BTC) Treasury bonds, or "BitBonds," to help address the U.S. national debt.

This proposal aims to issue $2 trillion in bonds, with 90% of the proceeds going towards conventional government funding and 10% allocated to purchasing Bitcoin for a Strategic Bitcoin Reserve.

The bonds offer a 1% annual interest rate, significantly lower than standard Treasury bonds, but provide investors with exposure to potential Bitcoin price appreciation at maturity.

Investors would receive full principal repayment, fixed interest, and a performance-based Bitcoin-linked component, with the government retaining any excess gains.

The proposal suggests that even if Bitcoin prices remain stable, the U.S. could save approximately $354 billion over ten years by reducing interest payments on debt.

However, if Bitcoin appreciates historically, the program could significantly offset national debt by 2045.

The initiative aligns with President Trump's executive order establishing a Strategic Bitcoin Reserve, aiming to integrate Bitcoin into sovereign finance without additional taxpayer burden.

The plan includes a phased rollout and risk management strategies to mitigate market volatility.

“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,” noted Andrew Hohns and Matthew Pines from the Bitcoin Policy Institute.

The proposal positions the U.S. as a leader in integrating Bitcoin into national economic strategies, potentially enhancing its role in digital asset regulation and innovation.

However, the plan will likely face regulatory scrutiny before implementation.

At the time of reporting, the Bitcoin (BTC) price was $84,514.70.