Treasury Discusses Safeguarding $16.4B Bitcoin Reserve with Crypto Firms

The U.S. Treasury Department recently held meetings with top executives from three prominent crypto custody firms to discuss the safeguarding of the country’s Strategic Bitcoin Reserve. These discussions were aimed at addressing the security and management of the government's digital assets, which include a significant amount of Bitcoin.

Anchorage Digital, one of the firms involved, met with Treasury Department officials on Monday. According to Anchorage CEO Nathan McCauley, the officials inquired about best practices for custodying a national Bitcoin reserve and digital asset stockpile. They also sought information on how custody could impact stablecoins and market structure, topics currently under congressional scrutiny.

McCauley noted that the Treasury Department is approaching this new territory with caution, recognizing the historical significance of the U.S. government's involvement in the digital asset space. The Treasury Department did not provide a comment on the matter.

A source from Capitol Hill, familiar with the meetings, revealed that the Treasury Department is in the early stages of determining the best approach to securing billions of dollars worth of digital assets. The source indicated that the department is actively seeking information from industry participants to guide their decisions on custodying the strategic reserve and stockpile.

Industry key decision-makers appear to favor the use of one or multiple third-party custodians to assist with the government’s Bitcoin reserve in the interim. The long-term goal is for the government to eventually self-custody its assets, which involves independently holding crypto in cold wallets accessed with private keys, rather than relying on third parties.

However, the national digital assets stockpile, which includes a variety of seized crypto assets on different blockchain networks, is likely to be permanently custodied by a third party. Currently, the U.S. Marshals Service has entrusted Coinbase with the custody of its large-cap digital asset holdings. When asked about the current custody of the government’s Bitcoin, a Coinbase representative declined to comment, referring only to a recent post by CEO Brian Armstrong.

During an event in Washington, executives from BitGo, Casa, and Anchorage Digital convened a panel to discuss "Safeguarding America’s Bitcoin." The panelists speculated on the current state of the government’s Bitcoin holdings, which are valued at approximately $16.4 billion. They suggested that the Bitcoin might be stored in a secure location within the U.S. Marshals Office or on a drive at someone’s desk.