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Finextra
2 days ago
- Business
- Finextra
Towards US Strategic Bitcoin reserve: first reactions and mixed feelings: By Carlo R.W. De Meijer
In march 2025 the new elected US present Trump signed an executive order establishing a Strategic Bitcoin reserve as part of the Bitcoin Act of 2025. This announcement has sent an enormous wave around the world. The idea of creating a Strategic Bitcoin reserve has also gained momentum in other countries worldwide.. The establishment of the reserve signals a paradigm shift in US financial policy, positioning the nation as a leader in digital asset adoption, but it also raises concerns about market volatility, regulatory frameworks, and geopolitical implications. In this blog we will go into more detail what this Strategic Bitcoin reserve is, its main objectives and how it is structured. What are the first reactions on the markets, how are US states reacting and how is this plan received in other countries around the world. But also what are the potential economic and financial implications of this Strategic Bitcoin reserve if it would be accepted. US Bitcoin Act of 2025 The Bitcoin Act of 2025 (S.954), introduced in the 119th Congress (2025–2026), proposes the establishment of a Strategic Bitcoin reserve. At the core of the bill the US government will purchase 1 million Bitcoin over five years and hold it for 20 years. The aim is to position Bitcoin as a long-term store of value and national economic hedge, especially in the face of rising global inflation and fiat currency devaluation. According to recent data, the bill has gained substantial traction, with a majority in both Senate and House of Representatives. With strong bipartisan support and momentum building, this act could reshape the role of Bitcoin in national economic and geopolitical strategy. Trump Strategic Bitcoin reserve plan On March 6, 2025, President Donald Trump signed an executive order launching a US Strategic Bitcoin reserve and establishing a broader national Digital Asset Stockpile, to serve as a secure account for the management of federally held digital assets, thereby aiming to position the US as the 'Crypto Capital of the World'. What are Strategic Bitcoin Reserves The new Strategic Bitcoin reserve are government-owned Bitcoin assets designed to offer economic stability and financial resilience. Compared to traditional final assets, Bitcoin can't be confiscated or controlled. The US essentially aims to use Bitcoin as a 'digital' gold reserve, alongside petroleum, dollars, gold, and foreign currencies, that could hedge against fiat currency devaluation. Just like gold, Bitcoin possesses many robust qualities that could make it a suitable reserve currency. It is independent and decentralized from traditional finance and it is secure. According to opponents this Bitcoin supply 'could benefit and become a hedge for US debt crisis, for inflation, and for a number of other economic downsides that the US is facing as a country'. U.S. Digital Asset Stockpile In parallel to the Strategic Bitcoin reserve, Trump's Executive Order also calls for the establishment of a US Digital Asset Stockpile, that could serve as a secure account for orderly and strategic management of the US' other digital asset holdings obtained through forfeiture, enabling strategic disposition or sale over time. Next to Bitcoin, this reserve comprises cryptocurrencies seized through legal proceedings, including, Ethereum, XRP, Solana, and Cardano. The Presidential Working Group on Digital Assets is directed to manage these non‐Bitcoin digital assets seized by Treasury, to diversify its strategic reserves beyond gold and foreign currencies. The order gives 30 days for agency heads to provide a full accounting of all digital assets in their possession, including those that might need to be transferred into either the Strategic Bitcoin reserve or the US Digital Asset Stockpile. Main objectives of a US Strategic Bitcoin Reserve This initiative underscores the Trump's commitment to integrating digital assets into the national financial infrastructure and is marking a major milestone in the country's bid toward becoming a global cryptocurrency hub and the world leader in the evolving digital economy. The US government's decision to establish a Strategic Bitcoin reserve reflects a proactive approach to integrating digital assets and positioning Bitcoin as a cornerstone of national financial strategy, one that could serve as a hedge against inflation and economic volatility, while enhancing the state's long-term financial resilience. This strategic Bitcoin reserve could be used as a means of reducing the government's massive debt and strengthening the US economy. If Bitcoin continues to grow, having a strategic reserve backed by this asset can help pay off debt and provide economic security. The main objective of the Trump administration using this strategic Bitcoin reserve is as a proactive measure to bolster national security in an increasingly digital world, thereby mitigating risks associated with cyber threats and economic instability. They further aim to mitigate potential vulnerabilities by incorporating Bitcoin into its reserve strategy, reducing its dependence on foreign currencies, thereby offering a hedge against the risks associated with centralized foreign fiat currencies, asserting greater control over its monetary policy. It may also be used as a catalyst for innovation in financial technologies, paving the way for more efficient and secure financial systems, positioning the US at the forefront of the digital asset revolution. As a result, the US can maintain the dollar's dominance as the world's top reserve currency. It could also potentially hedge against the global adoption of Bitcoin. Funding of US Strategic Bitcoin Reserve The establishment and expansion of the Strategic Bitcoin reserve are intended to be budget-neutral. Aim is to expand the reserve's holdings without imposing additional financial burdens on taxpayers. Government Bitcoin deposited into the Strategic Bitcoin reserve shall not be sold and shall be maintained as reserve assets of the United States utilized to meet governmental objectives in accordance with applicable law, ensuring they serve as long-term strategic resources. Initially the reserve will be capitalized with approximately 200,000 BTC, valued at over $20 billion, owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. A second funding method is redirecting surplus funds returned to the Treasury from the Federal Reserve, potentially repurposing these funds for Bitcoin acquisitions. A third one is revaluing US gold certificates from their statutory value of $43 per ounce to current market prices, with the proceeds earmarked exclusively for Bitcoin purchases. The reserve's composition may extend beyond Bitcoin to include other cryptocurrencies including Ethereum, XRP, Solana, and Cardano, forming a diversified digital asset portfolio, under the condition that they have averaged a $500B market cap over the past year. This diversification aims to bolster the reserve's resilience and strategic value. Management of these assets The Department of the Treasury will take affirmative steps to centralize ownership, control and management of these assets within the federal government. They will establish a dedicated office to administer the reserves, with authority to deploy various strategies—such as dollar‐cost averaging and hedging—to manage holdings. The amount held will be publicly attested and visible on the blockchain as proof-of-reserve. Importantly, the governing framework prohibits any sale of held bitcoin; all holdings must be maintained as a strategic store of value. This will ensure proper oversight, accurate tracking and a cohesive approach to managing the government's cryptocurrency holdings Custody and Security Frameworks The Department of the Treasury is also tasked with developing a robust custody and security framework aimed at ensuring security. That will include maintaining clear ownership and control by ensuring that government Bitcoin reserves are strictly segregated from other assets. Multisig wallets will be employed that require multiple private keys for transaction authorization, enhancing security against unauthorized access. Offline storage methods will be used to protect assets from cyber threats and hacking attempts, while comprehensive insurance policies will be secured. Market reactions: Bitcoin price jumped to $110.000 The cryptocurrency market has already felt the impact of news of the bill. The announcement triggered an immediate market surge, leading to a swell in cryptocurrency valuations, with Bitcoin's price jumping by 15% to $ 110.0000, adding almost $200 billion to its market capitalization. With other cryptocurrencies including XRP, Solana, Cardano, and Ethereum showing remarkable surges, the total crypto market capitalization increased by over $300 billion. This phenomenon reinforces the view that the involvement of governments and official institutions can boost market confidence and wider adoption of cryptocurrencies. Mixed Reactions by US federal states The reactions in the US, both in the political and public world on Trump's plan to introduce a Strategic Bitcoin reserve remain divided. While some express enthusiasm for the government's pro-active approach to digital assets acknowledging the potential benefits of a national digital asset reserve and view the move as a forward-thinking strategy to enhance national financial security. Others express concerns about the implications of holding volatile digital assets, remaining sceptical about the risks associated with such investments. Proponents According to the proponents the establishment of this Strategic Bitcoin reserve could have significant implications for the financial landscape. It could signal US leadership in digital finance. They argue that the Bitcoin reserve measure would position the US at the forefront of digital asset integration, thanks to greater diversification, thereby reducing dependence on traditional assets. It would also help address the US national debt. By integration digital assets into public investment portfolios, the US may achieve greater diversification and as a result could generate higher returns, potential offsetting national debt. Supporters also believe holding bitcoin reserves could enable states to hedge against inflation and economic stability thereby protect the state's savings. Critics Despite support from crypto advocates, the proposed reserve plan has faced resistance from a number of political and financial leaders Critics argued that Bitcoin remains a volatile and unproven asset class for public funds, necessitating careful risk management and regulatory oversight. They highlight the risk of financial losses for taxpayers when holding large quantities of a highly volatile asset. Critics also say it offers little strategic value. They warn that it makes little sense for the US government to hold a volatile asset that has no intrinsic value (like gold) or key strategic commercial application (like oil) Critics further caution that both political donations and the Trump family's financial interests in crypto pose potential conflicts of interest. Some US states said 'yes' to a Strategic Crypto Reserve Twenty US states had proposed a Bitcoin reserve bill as of February 2025. In the past weeks, the governors of three US states including New Hampshire, Arizona and Texas, have officially signed bills, which now make it legal for the states to establish Strategic Bitcoin reserves. Other states such as Utah, Oklahoma, Kentucky, Pennsylvania and North Carolina are considering similar policies but are moving slower, waiting for further progress. New Hampshire became the first US state to have signed a Strategic Bitcoin reserve bill New Hampshire became the first US state to have officially signed a Strategic Bitcoin reserve bill, House Bill 302(HB 302) into law on May 6. This allows investment into Bitcoin and other digital assets that has averaged a $500B market cap over the past year. Bitcoin is the only digital asset that passes the said provision. Neither Ethereum nor XRP, or any other crypto asset has reached the required market capitalization average. Furthermore, the regulations set a maximum limit of 5% of the total state reserves for investments in Bitcoin, thus ensuring that this cryptocurrency serves as a complement, but not a dominant component of the state's financial strategy. The state's SBR law also ensured that custodial arrangements for New Hampshire's Bitcoin holdings are robust. The regulation requires that any Bitcoin or digital asset held by the treasurer be maintained in regulated custody in the United States. Assets must be held in state-controlled multisig wallet system, directly controlled by the state, or through qualified custodians or products traded exclusively on US exchanges, maximizing security and transparency. Arizona has become second state to establish Strategic Bitcoin reserve Arizona has becoming the second state in the US to create a Strategic Bitcoin reserve, alongside New Hampshire. Arizona recently advanced its own Bitcoin reserve legislation further than any other state. The Digital Assets Strategic Reserve bill would have allowed Arizona to invest seized funds into Bitcoin. On May 3, Arizona's House Bill 1025, which would have created a state-managed Bitcoin reserve using seized funds, was vetoed. The Governor signed House Bill 2749 into law, a budget-neutral approach that channels profits from unclaimed property into Bitcoin and other top-tier digital assets. By putting otherwise unused funds to work, the state is taking a strategic, forward-looking approach to safeguard its treasury without raising taxes or using the general fund. Additionally, Senate Bill 1373, which would permit the state treasurer to allocate up to 10% or $31,5 bn assets was further approved. Texas: step nearer of official Strategic Bitcoin reserve The state of Texas is one step closer to create a state-level Bitcoin reserve, after Bill SB 21 successfully passed its second reading in the Texas House of Representatives, where it received broad cross-party support. If enacted, Texas will become the third state in the US to establish an official Bitcoin reserve, following in the footsteps of New Hampshire and Arizona. This Bill would authorize the state Texas to buy, hold, and manage Bitcoin as part of a government-run reserve. The reserve would be funded through a mix of legislative appropriations, investment earnings, and voluntary donations from Texas residents. It would also include any Bitcoin or other qualifying crypto assets received via forks or airdrops. The fund will be used to invest a portion of public funds in Bitcoin as part of Texas' financial diversification strategy. However, the bill sets strict eligibility criteria. The bill stipulates that any digital assets included in the reserve must have a market cap of at least $500 billion, and be maintained for two consecutive years, to ensure only established and stable cryptocurrencies can be included in the portfolio, a threshold currently met only by Bitcoin. The bill authorizes the Office of the Texas Comptroller of Public Accounts to manage the state's Bitcoin reserves, in collaboration with the state's finance department and budget office. While Eight US federal states have Said 'No' To a Crypto Reserve US federal states are increasingly exploring cryptocurrency legislation, yet most are encountering roadblocks in the form of political resistance, public scepticism, or executive vetoes. Eight US states have officially said no to a Strategic Bitcoin reserve of which Florida was the last one. On May 6 this US state has officially withdrawn two bills (House Bill 487 and Senate Bill 550) that were aimed at establishing a Strategic Bitcoin reserve, designed to allocate up to 10% of select public funds to Bitcoin. These bills were part of a broader movement among several U.S. states aiming to diversify public fund portfolios with digital assets, particularly Bitcoin. The cautious approach to digital assets is not unique to Florida. The US Florida's withdrawal from the state-level crypto investment race aligns it with several other states - such as Wyoming, South Dakota, North Dakota, Pennsylvania, Montana, and Oklahoma - that have similarly seen their Bitcoin-focused bills fail to progress. The stalling of these bills indicates a broader hesitancy among state legislators to embrace digital assets as part of official financial strategies. Mixed reactions nations worldwide The international response to the US Strategic Bitcoin reserve proposal has also remained mixed. With the US leading the way, the world is already seeing a number countries planning to adopt digital assets into their monetary systems. In Europe several countries are exploring Bitcoin as a strategic reserve to diversify . A Ukrainian lawmaker expressed intentions to introduce a national Bitcoin reserve bill, with support from Binance as a strategic partner. The Ukrainian plan may be the first in Europe, but it likely will not be the last. In Ireland, former UFC fighter Conor McGregor pushed for plans to establish a national Bitcoin reserve. Last month, two Swedish lawmakers urged the government to seriously consider Bitcoin as a part of the nation's financial strategy. The prospect of holding the leading cryptocurrency has also gained momentum lately in countries like the Czech Republic. But also other countries outside Europe are beginning to see Bitcoin as a strategic resource. The Brazilian Central Bank has said that it is interested in researching digital reserves. Brazil is moving to establish a sovereign Bitcoin reserve, with high crypto adoption rates bolstering its potential. In Africa the Central African Republic 'joined the fray' of Bitcoin, which became a legal tender after El Salvador paved the way a few years back. While in Asia countries like China, Hong Kong and Japan are showing interest. A large number of countries worldwide however are more reluctant, using a wait-and see attitude. In Europe the UK has ruled out holding Bitcoin as a national reserve asset. Meanwhile the Swiss National Bank has echoed similar concerns. The crypto currency market liquidity and volatility continue to present risks for long-term value preservation. Forward thinking: shift the balance of power in global finance But this mixed attitude by both US federal states and nations worldwide could fundamentally change if the US government succeeds in implementing this Strategic Bitcoin reserve plan. This may mark an unprecedented step toward integrating digital currencies into the national financial architecture, reducing the reliance on traditional fiat currencies, and potentially stabilize its financial system making Bitcoin a geopolitical asset, not just a speculative investment. With the US leading the charge, this move could pressure other global economies to react swiftly reconsidering their stance on digital currencies, potentially accelerating global adoption. The US approach may thereby serve as a model for other countries, influencing global standards and practices in digital asset management. The creation of a US Strategic Bitcoin reserve may greatly influence the future of global finance, with nations worldwide reassessing their reserve assets in light of US's move. Experts say that as additional countries embrace Bitcoin, it could become an important part of global finance. It might be able to hold national wealth, underwrite international trade, or even stand in for parts of conventional foreign reserves. The Strategic Bitcoin reserve could shift the balance of power in global finance, making digital assets like Bitcoin part of public finance strategies. This could also lead to clearer regulatory frameworks for digital assets, potentially leading to more institutional participation and mainstream adoption.
Bloomberg
5 days ago
- Business
- Bloomberg
China Seeks to Slow Yuan's Gains After Months of Propping It Up
The dollar's extended slide has prompted China's central bank to change tack in managing its currency, as it pivots from supporting the yuan to guarding against the risk of a rapid appreciation. The People's Bank of China has set the yuan's daily fixing at a slightly weaker level than market forecasts this week, after setting it stronger for most of the past six months. The PBOC is also on track to pause bill sales in Hong Kong for a third month, the longest run since 2018, leaving liquidity ample and easing upward pressure on the yuan.
Telegraph
22-05-2025
- Business
- Telegraph
The maths behind Starmer's Chagos sleight of hand
In exchange for the privilege of ceding sovereign British territory to Mauritius, Sir Keir Starmer has agreed to fork out billions of pounds of taxpayers' money. Britain is set to pay £101 million per year for 99 years, or a hair under £10 billion in total. Add in all the supplementary payments and inflation and it's closer to £30 billion. Read the Government press release, however, and we're apparently paying out £3.4 billion. So which number is correct? The short answer is both of them. The slightly more complicated answer is that it depends on what you're doing. The longer answer is that Sir Keir is engaged in a mathematical sleight of hand. The £30 billion is what you get if you add up the cash value of every payment, uprating some for inflation at 2 per cent each year. But if we want to know how much a policy actually costs, we need to remember that £1 today and £1 in 2134 have very different values. This is partly because of inflation (which decreases the value of money over time), and partly because future payments are 'discounted' to get a present value: if we want to put a single figure on the cost of a policy spread over many years, we need to translate each year's spending into present-day values. Economists refer to this as the net present value of a series of payments. Conceptually, we can think of this as the sum we'd need to set aside today to fund spending £100 million or so each year for 99 years. Because the money will earn interest, we don't actually need the full £30 billion. We just need the equivalent net present value. And the net present value of all the payments combined, discounted by around 5 per cent each year, is roughly £3.4 billion. It's at this point that the sleight of hand has taken place. There's absolutely nothing wrong with using net present values. Generally speaking, they're the best number for economic analysis, letting us compare a series of costs and benefits in today's money. However, they are very rarely the figures politicians use. And they certainly aren't the numbers deployed when they wish to give the impression of generous spending. For instance, when the Prime Minister announced £22 billion of investment into carbon capture and storage over 25 years, he didn't break it down by year, discount it, and give a neat present value. Instead, he gave the larger, nominal number. Quite why, having signed an embarrassingly defeatist treaty set to cost the UK billions over the next century, Sir Keir has suddenly been persuaded of the economist's view on the merits of present value calculations, will have to remain a mystery.
Yahoo
13-05-2025
- Business
- Yahoo
Mitsubishi Electric Announces Dividend for Fiscal 2025 (April 1, 2024 – March 31, 2025) and Dividend Forecast for Fiscal 2026 (April 1, 2025 – March 31, 2026)
TOKYO, May 13, 2025--(BUSINESS WIRE)--Mitsubishi Electric Corporation (TOKYO:6503) announced today that the Board of Directors has resolved to pay a year-end dividend of 30 yen per share for fiscal 2025, as of the record date of March 31, 2025. Mitsubishi Electric has a basic policy in dividend payment of approximately 3% in adjusted DOE* to ensure consistency from the perspective of providing appropriate returns to shareholders in line with the level of Mitsubishi Electric Corporation stockholders' equity and maintaining financial soundness to continue investments for growth. For fiscal 2026, the company plans to pay an interim dividend of 25 yen per share and a year-end dividend of 30 yen per share, as of the record date of March 31, 2026, based on the basic policy above. The actual interim dividend will be declared at the Board of Directors' meeting in October 2025, and the actual year-end dividend at the Board of Director's meeting in May 2026. Fiscal 2025 year-end dividend(as of the record date of March 31, 2025) Fiscal 2025 Dividend (final) Previous Forecast for Fiscal 2025 Dividend (as of April 28, 2025) Fiscal 2024 Dividend Record date March 31, 2025 March 31, 2025 March 31, 2024 Dividend per share 30 yen 30 yen 30 yen Total amount of dividends 62,319 million yen － 62,702 million yen Effective date June 3, 2025 － June 4, 2024 Dividend resource Retained earnings － Retained earnings *Adjusted DOE(dividend on equity ratio): Adjusted ratio of dividends to stockholders' equity [dividend paid / the stockholders' equity(excluding accumulated other comprehensive income (loss))]. Fiscal 2026 dividend forecast(as of the record date of March 31, 2026) Dividend per share Interim dividend Year-end dividend Annual dividend Fiscal 2026(previous announcement as of April 28, 2025) To be determined To be determined To be determined Fiscal 2026(present announcement) 25 yen 30 yen 55 yen Fiscal 2025(actual) 20 yen 30 yen 50 yen Note: The forecast above is based on assumptions deemed reasonable by the company at the present time, and actual results may differ significantly from forecasts. Please refer to the cautionary statement in the full document. For more information, please visit: View source version on Contacts Investor Relations Inquiries Corporate IR and SR DivisionMitsubishi Electric Media Inquiries Madoka IwanagaPublic Relations DivisionMitsubishi Electric CorporationTel: + Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fox News
07-05-2025
- Business
- Fox News
'New sheriff in town': State finance leader rallies around key Trump victory saving 'taxpayer dollars'
President Donald Trump's executive order ending diversity, equity and inclusion (DEI) programs in the federal government has returned financial power to the people, OJ Oleka, CEO of the State Financial Officers Foundation, told Fox News Digital. Oleka said there's a "new sheriff in town" and that Trump is "making good" on his promise to eliminate DEI by shifting financial policies "away from the left and back to the center," empowering state financial officers and building trust with the American people. "We know that when companies focus on business, their business does better. If their business does better, shareholders make more money, their employees have a better quality of life within their business and their consumers get a better product," Oleka told Fox News Digital at the State Financial Officers Foundation conference in Orlando, Florida. Oleka said focusing on financial returns and merit-based incentives over DEI or environmental, social and governance (ESG) policies creates "more money for shareholders, better culture in the office for employees and better products for consumers and customers," exactly what state financial officers have been asking for. WHITE HOUSE VOWS TO IMPLEMENT 'SYSTEM OF MERIT' IN US, DISMANTLE DEI 'STRANGULATION' "The American people want every individual to succeed," Oleka said. "They want people to succeed on their merit, on their ability, on their skill. It's very important to us as Americans. But what they don't want is for people to get preferences just because of some political ideology." He said there are misconceptions about DEI "because people hear diversity, equity and inclusion, and they think, 'Well, those are good things. I support diversity. I want people to be included, and people should have the resources that they need.' "To be very clear, when we're talking about DEI, we're saying that DEI is trying to provide racial or gender preferences for people based on past grievances. It effectively has nothing to do with merit or looking at somebody's skill for a job or for an opportunity." MAJOR UNIVERSITY MEDICAL CENTER ACCUSED OF HIDING DEI PROGRAMS, INFLUENTIAL SENATOR CALLS THEM OUT Equal opportunity is giving people access to create their own opportunities, to try to be as successful as they can be with their skills, ability and merit, according to Oleka. Oleka explained that DEI is subjective because it prefers "folks based on what you think is important, based on your own politics." "It's bad to say, from a company's perspective, 'Let's just hire people based on race, based on gender,' as opposed to skill and ability," Oleka said. "It's bad because it can harm the performance of what that company actually does with their business responsibilities. That matters to our financial officers because they invest in a lot of these companies. It's their job as fiduciary leaders to make sure that the pensions that they invest, the public funds that they invest by virtue of their positions, are actually done so by companies and with funds where the returns are going to be high. "We can't guarantee that the returns are going to be as high as they can be if the companies aren't even focusing on their specific mandate, on their responsibility. Instead, they're focusing on their politics and trying to force an ideology or social agenda through their businesses. That's not what business is for." Oleka said his experience as someone with a Ph.D. in higher education who is also the son of Nigerian immigrants informs his rejection of political ideology or agendas in government-funded programs, including in public education, because these policies don't improve students' learning experience or academic performance. "That doesn't actually contribute to kids' learning," Oleka said. "It doesn't contribute to human flourishing. There really is no reason why people's taxpayer dollars should be spent on that." Oleka told Fox News Digital the Orlando conference was critical to reminding state financial officers across the country they are not alone in pushing back against DEI and ESG policies that were promoted by former President Joe Biden's administration. "It goes back to what I think most Americans believe. Their state government is closer to them than the federal government," he said. "As a result, state leaders should have more power, as it relates to their finances, than the federal government, and what a state leader should do with that power is give it back to the people." CLICK HERE TO GET THE FOX NEWS APP By empowering state financial officers to focus on financial returns and fiduciary duty instead of ideology and politics, Oleka said more Americans are incentivized financially. "It's important that we have that same kind of leadership in the White House at the state level, making good on their promise to bring a Golden Age to America and to each state," he said.
