- Philippines proposes a new bill that mandates the Bangko Sentral ng Pilipinas (BSP) to purchase 2,000 BTC annually for five years.
- The Governor of the bank must ensure that all Bitcoin is kept in cold storage for at least 20 years and only used to finance government debt
- Even for debt repayment, the withdrawal will be capped at 10% every two years.
A new development bill introduced in the Philippines’ House of Representatives has proposed the creation of a Strategic Bitcoin Reserve for the island nation. The bill will allow the government to hold Bitcoin alongside traditional holdings like the U.S. dollar and gold. Authored by Rep. Miguel Luis “Migz” Villafuerte, House Bill 421 mandates the Bangko Sentral ng Pilipinas (BSP) to purchase 2,000 Bitcoin annually over five years. This will take the country’s total reserve to 10,000 BTC, currently worth ~$1.1 billion.
Strict long-term custody conditions
The bill states that to ensure long-term stability, the Governor, who will be in charge of the Bitcoin purchase program, will ensure that all BTC will be stored in the Strategic Bitcoin Reserve for a minimum of 20 years. The government won’t be allowed to dispose of the BTC easily, except to fund retiring outstanding government debt instruments. Even to do so, only up to 10% of the holdings can be allowed to be sold within any two years.
Transparency measures in place
The proposal also specifies that one year before the 20-year holding period expires, the BSP Governor must submit recommendations to Congress on whether to extend the reserve or allow further controlled release. The bill also emphasizes transparency, requiring the BSP to issue annual or quarterly proof-of-reserves reports detailing holdings, transactions, and custody controls. They can also select an independent third-party auditor with expertise in cryptography to verify the integrity of the reports.
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Betting on BTC’s ‘Digital Gold’ quality
Rep. Villafuerte has given enough and more reasons for how various countries around the world have adopted similar Bitcoin strategic reserves, also citing its “Digital Gold” quality. He has even cited Bitcoin’s ~40% compound annual growth rate over the last five years as a key rationale for diversifying the nation’s asset base.
If enacted, the Philippines would become among the few Asian nations to formally adopt a sovereign Bitcoin reserve. So far, Bhutan has its own BTC mining operations. China also holds a large amount of BTC. Malaysia and Thailand have proposed and sandboxed Bitcoin payment programs to improve their financial structures.
