Three of the 50 states of America are expected to create local Bitcoin reserves soon. The bills differ from the proposal of the American National Bitcoin Reserve and demonstrate local specifics.

America is bullish on Bitcoin. Allegedly, each fifth American owns some BTC. While the U.S. President is pushing to create a strategic Bitcoin reserve, the states are working on local reserves. The Ohio and Texas proposals to create such reserves are about to pass; Pennsylvania is following their way, while other states are doing their considerations.

What are the specs of the local proposals compared to the federal bill?

The main distinction is that the local proposals have different end goals if compared to the federal-level proposal. The federal bill is aimed to cover the national debt and calls for purchasing one million BTC that should be stored in the U.S. Treasury. 

The Texas bill is aimed at accumulating bitcoins by collecting taxes and donations in cryptocurrency. More than that, Texas has a minimum five-year embargo on selling state bitcoins. Ohio and Pennsylvania are willing to accumulate some BTC as a hedge against the eroding USD value. Bitcoins must be bought by the local treasuries. The bills don’t elaborate precisely on the terms.

The Cynthia Lummis bill

The Federal Reserve bill was introduced in July 2024 by Wyoming Sen. Cynthia Lummis. Her proposal is called Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act. The Lummis bill is expressly presented as a means to pay down the U.S. national debt. 

Apart from national debt, Lummis mentions soaring inflation rates in the introduction and calls the creation of the reserve a Louisiana Purchase moment. Comparing huge-scale Bitcoin purchases with buying American lands in the past became a popular trope among Bitcoin maximalists.

According to the Lummis proposal, Bitcoin is seen as an additional store of value in the federal balance sheet. The bill suggests that the government must establish a U.S. Treasury-controlled decentralized network of Bitcoin vaults. On top of that, the government must purchase one million BTC, which is around 5% of the total supply. The amount is dictated by the fact that the U.S. is already holding 5% of all gold. Private Bitcoin holders should be given self-custody rights. 

The local bills

The local bills of Texas and Ohio don’t include direct intentions to purchase a specified amount of BTC in a certain period, nor are they intended to eliminate the state debts. 

President-elect Donald Trump’s promise to ensure all remaining Bitcoin is “made in the USA” has sparked widespread debate. Announced during a meeting with crypto mining executives, the pledge reflects a shift in Trump’s stance on digital currencies. Despite this commitment, experts caution that achieving this goal may be unattainable due to various reasons discussed in this article.

Is Donald Trump Bitcoin Strategy Achievable?

Recent data indicate that 95% of Bitcoin has already been mined, leaving only a small fraction available for production. This reality makes President-elect Donald Trump’s promise to produce Bitcoin exclusively within the United States highly challenging. Bitcoin mining operates on a decentralized network, meaning no single country or entity can control the process.

Additionally, global mining operations dominate the industry, with US crypto miners contributing less than 50% of the total computing power. This disparity underscores the difficulty of centralizing Bitcoin production to a single nation. The highly competitive nature of the sector further complicates efforts to shift the balance entirely to domestic players.

More so, these challenges erupt even as Japan rejects Bitcoin for national reserves, prioritizing stability in its foreign exchange strategy. The government highlighted BTC price volatility and misalignment with traditional financial systems. 

Interestingly, this cautious stance contrasts sharply with other Japanese private entities. For example, Japan’s MicroStrategy, Metaplanet, invested ¥9.5 billion to purchase 617 BTC, raising its total holdings to 1,761.98 BTC. This move boosted its Bitcoin treasury by 56% amid a price dip. The company reported a 309% yield on its BTC holdings in Q4, with CEO Simon Gerovich emphasizing Bitcoin’s role in safeguarding capital against the declining Yen. 

Global Competition and Equipment Reliance Challenges

Bitcoin mining is increasingly driven by international players with deep resources, such as miners in Africa, Asia, and the Middle East. These regions often benefit from lower energy costs and fewer regulatory barriers, providing an edge over US operations. For example, countries like Ethiopia and Argentina offer access to cheap hydropower and stable revenue streams in US dollars. This boosts their competitiveness in the market.

Adding to the challenge, most Bitcoin mining equipment is manufactured by Chinese companies, particularly Bitmain. A trade war or tariff policies under Donald Trump’s administration could raise the cost of importing essential machinery, creating additional obstacles for US crypto miners.

However, despite the ambitious pledge, Donald Trump has found support from several US-based mining companies, such as CleanSpark Inc. and Riot Platforms Inc. These companies anticipate that his administration will reduce environmental regulations and increase industry support. However, some US miners are even turning to overseas partnerships to mitigate rising energy costs at home.

For instance, MARA Holdings Inc. has announced a joint venture with an Abu Dhabi sovereign wealth fund to establish one of the largest mining farms in the Middle East. While Donald Trump’s commitment to making Bitcoin “made in the USA” aligns with his broader economic goals, it faces structural and logistical barriers.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.