Strategic Bitcoin Reserve Delayed? Treasury, Commerce Reportedly Debate Custody Of Over $20B BTC Holdings

• The Trump administration is reportedly weighing whether the Treasury Department or the Commerce Department should oversee the proposed Strategic Bitcoin Reserve.
• The Justice Department's Office of Legal Counsel is reportedly reviewing the legal framework as officials assess whether the Treasury has the authority to manage the reserve.
• The reserve would initially be funded with Bitcoin seized by the federal government, while agencies continue exploring budget-neutral ways to acquire additional Bitcoin.

The Trump administration's Strategic Bitcoin (BTC) Reserve plan reportedly hit a legal and bureaucratic snag, with two federal agencies competing for control and legal authority over $20 billion in BTC, while the Justice Department lawyers review the legal authority needed to manage the reserve.

According to a Bloomberg report on Monday, the Treasury Department and Commerce Department were both under consideration to oversee the reserve, with the Justice Department's Office of Legal Counsel working to determine a legally viable framework.

Why The Reserve Is Stuck

According to the report, President Trump ordered the reserve's creation last year, with Bitcoin from federal asset seizures and possible new purchases intended to be housed inside the Treasury Department. A concern later arose over whether the Treasury was legally able to manage the holdings, according to people familiar with the matter who were not authorized to speak publicly. 

White House spokesperson Liz Huston said the administration "continues to evaluate the best structure" for the Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile. Trump had separately ordered the two departments to jointly develop budget-neutral strategies for acquiring more Bitcoin, the report stated.

Bitcoin’s price reclaimed $63,339.76 and was up over 1% in the past 24 hours. On Stocktwits, the retail sentiment around BTC remained in the ‘bullish’ zone, while chatter around it rose to ‘normal’ from ‘low’ levels over the past day.

Billions In Holdings, Billions In Losses

The U.S. government was among the largest holders of Bitcoin globally, with holdings worth more than $20 billion. Bitcoin hit an all-time high in October last year, but has fallen nearly 50% since then. 

The White House has said that premature Bitcoin sales have cost taxpayers roughly $17 billion over the years and that consolidating holdings into a single reserve would give the country a strategic advantage, according to the Bloomberg report. Additionally, Trump had said in a fact sheet last year that he was "very positive and open-minded" toward the crypto industry.

Trump's Crypto Holdings Under Scrutiny

The disclosure of inter-agency friction over the reserve came as President Trump's own crypto holdings faced separate scrutiny. 

Trump's disclosed cryptocurrency holdings had lost an estimated $44.4 million in paper value since their reported filing date, as declines in Bitcoin and Ethereum (ETH) weighed on his Bitcoin reserves and family-linked World Liberty Financial (WLFI) stake. 

Read also: Bitcoin Bear Sees BTC Sliding Toward $10K, Says Strategy’s Saylor Must Be ‘Stopped Out’

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