Standard Chartered's Extraordinary Proposal to Fill the U.S. Strategic Bitcoin Reserve!

Geoff Kendrick, the digital assets research director at Standard Chartered, proposed an independent approach to funding the newly established US Strategic Bitcoin Reserve by selling a portion of the country's gold assets to acquire Bitcoin.

Kendrick emphasized that the US government currently holds approximately 760 billion dollars worth of gold. "The next question is what independent strategies can be formed apart from the budget, and theoretically the following can be done: selling gold and buying Bitcoin," he said.

This development came after President Donald Trump's official formation of the Strategic Bitcoin Reserve and Digital Asset Stock, indicating a historic shift in the federal government's approach to digital assets, following the recent decree. According to the order, all future Bitcoin purchases for the reserve should be consistent with budget-independent financing strategies that do not impose additional burdens on American taxpayers.

The directive also envisions transferring all Bitcoin currently held by the US government to the Strategic Bitcoin Reserve with a strict condition that none of it be sold.

Kendrick, beyond the sale of gold, identified additional strategies to finance the SRF without increasing government spending. One potential avenue is to utilize the Exchange Stabilization Fund (ESF) with a net worth of $39 billion. Kendrick noted that repurposing the ESF, traditionally used to stabilize financial markets, for Bitcoin purchases would represent a "clear change in direction."

Another possibility is the integration of Senator Cynthia Lummis's proposed 2024 Bitcoin Law into the funding framework. The legislation aims to allocate 200,000 BTC annually for five years. Kendrick believes that if properly structured, this law can be implemented independently of the budget.

While President Trump is expected to detail the Strategic Bitcoin Reserve at today's White House Digital Assets Summit, Kendrick warned that urgent policy actions may not be feasible. Kendrick pointed to Treasury Secretary Scott Bessent's role in formulating and executing a comprehensive acquisition strategy. Kendrick said, "In reality, I don't see any of these three solutions being presented today," adding, "Rather, given the importance placed on Bessent in the decree, all of them would require Treasury Secretary Bessent to propose something."

Kendrick also suggested that institutional investors, including U.S. states and pension funds, could follow the lead of the federal government in allocating to Bitcoin.

Kendrick also noted that the establishment of a Strategic Bitcoin Reserve could lead other sovereign countries to adopt similar strategies. Kendrick said, “I have previously written about how the strategic reserve of the United States, no matter how it may appear, could encourage other countries.” Abu Dhabi recently pointed to BlackRock's iShares Bitcoin Trust's purchase of (IBIT) equivalent shares to 4,700 BTC as an example of the increasing sovereign interest in Bitcoin. “Other states will definitely participate in the purchase process,” he added.