US Agency Turf War Stalls Trump's Strategic Bitcoin Reserve Plan
Treasury and Commerce departments clash over legal authority to manage a $20B federal Bitcoin reserve, yet BTC still climbed Monday.
A bureaucratic standoff between two of Washington's most powerful agencies is threatening to derail one of President Donald Trump's signature crypto initiatives. The Treasury and Commerce departments are both vying for control of the planned Strategic Bitcoin Reserve, with neither side able to confirm it holds clear legal authority to manage the holdings — a dispute that has effectively frozen the policy's implementation even as Bitcoin prices rose Monday.
Trump ordered the reserve's creation, envisioning it housed within the Treasury Department and seeded with Bitcoin seized through federal asset forfeitures, along with potential future government purchases. However, concerns surfaced about whether Treasury can legally hold a volatile asset like Bitcoin indefinitely, forcing officials to explore routing the reserve through the Commerce Department instead. The Justice Department's Office of Legal Counsel is now actively working with both agencies to map out a legally defensible structure.
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The stakes are significant. The federal government currently holds more than $20 billion in Bitcoin spread across various agencies, making Washington one of the largest single Bitcoin holders on the planet. Any final decision on where to house the reserve — and under what legal framework — could carry real consequences for supply dynamics in the broader crypto market.
What's striking to traders is that Bitcoin managed to push higher Monday despite the policy uncertainty and a high-profile sell-off by Michael Saylor's Strategy, which disclosed it had sold 3,588 Bitcoin between June 29 and July 5. That resilience suggests markets are treating the reserve question as a slow-moving structural issue rather than an immediate price catalyst. Still, Bitcoin remains down nearly 50% from its October all-time high, a reminder of how much ground has been lost even as institutional and government interest in the asset grows.
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