Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

TWENTIETH CONGRESS
First Regular Session

421

HOUSE BILL NO.

Introduced by HON. MIGUEL LUIS R. VILLAFUERTE

EXPLANATORY NOTE

The first and most widely popular cryptocurrency to date is “Bitcoin” which was
introduced in 2009.' Bitcoin (BTC) is a decentralized digital asset that joins the ranks of
traditional assets such as cash, gold, and real estate.

For the past few years, the value of BTC has had its positive developments. Just
recently it reached an all-time high of $108,319. The US Federal Reserve Chairman said that
BTC is “digital gold.”

BTC’s growth has outpaced all other asset classes, with a compound annual growth
rate of about 40% over a five-year period. This increased value coincided with the constant
pronouncements of incoming United States President Donald Trump supporting the bill of Sen.
Cynthia Lummis of Wyoming to create a Strategic BTC Reserve

A Strategic Reserve is a stock of a critical resource that can be released at times of
crisis or supply disruptions. In the case of the United States, it has a strategic petroleum
reserve, Canada has the world's only strategic reserve of maple syrup, and China has strategic
reserves of grains, pork products, and metals, among others.>

The creation of a Strategic BTC Reserve, however. already gained traction in
finance governance across the world.

* In Central America, El Salvador already adopted BTC as legal tender and began
purchasing BTC to hold in reserve.*

* In South America, Brazil has introduced the sovereign Strategic BTC Reserve, also
known as RESBit, which seeks to allocate some of its international reserves to BTC.

* Inthe European Union, Switzerland is now considering BTC as its reserve alongside
gold. In Germany, former Finance Minister Christian Lindner has suggested the
reduction of reliance on USD and for the European Central Bank and the Bundesbank
to consider BTC as a way forward.

* Poland is also considering establishing a Strategic BTC Reserve to diversify its
financial assets. Presidential candidate Stawomir Mentzen proposed creating a
reserve to transform the country.

" Bangko Sentral ng Pilipinas. (n.4.). A virtual currency (VC) pnmer [POF]

naps ww bsp gov phiMedia_and_Research/Prmers'20Faqs/VC pat

'Bitcomm.com (nd). What is Bitcora? https www bitcoin corget-started/what-is-bitcorn
Keatinge, T. (2024, December 16). How would a U.S. Bilcoin strategic reserve work? Reuters,

https “www reuters. comlechnology/how-would-us-bicon-strategic-reserve-work-2024. 12-16

* JDSupra, (2025, January 10). What could a strategic Biicomn reserve look like? JOSupra.

nips “www jdsupra comMlegainews/whal-could-a-strategic-btcomn-reserve-6222502/


In Asia, Hong Kong legislator Wu Jiezhuang advocated for integrating BTC into the
city’s financial reserves. Bhutan set up its state-owned BTC mining operations and is
keeping the mined BTC in reserve. China is holding large amounts of BTC

‘© Moreover, according to Finance Minister Anton Siluanov, Russia has begun using BTC
and other digital currencies for international transactions as part of its strategy to
bypass Western sanctions and reduce reliance on USD. Russian President Viadimir
Putin recently said that BTC is “unstoppable” ®

* The Malaysian government also started considering the use of cryptocurrency
regulations to improve its national financial structure. ©

+ In Thailand, a Thai blockchain business leader is calling for immediate action to
develop a strategic cryptocurrency reserve alongside the Thai government's promise
to launch a sandboxed BTC payment program in Phuket.”

Other governments buying BTC for its strategic reserve would likely set off a wave
of BTC buying around the world. However, BTC has a fixed supply of 21 million, potentially
limiting its devaluation.* Investopedia notes that as of December 22, 2024, 19.9 million BTC
have been mined, leaving about 1.1 million BTC to release. As of January 2025, the United
States stands as the largest bitcoin holder at 207,189 BTC, followed by China at 194,000, and
United Kingdom at 61,000.

While the Philippines holds dollar and gold reserves, the increasing significance of
BTC in ensuring financial and economic prowess across continents makes it imperative for
the country to take significant legislative measures to maximize pressing economic
opportunities to safeguard our financial standing. This is timely as the Bureau of Treasury
recently issued a report that the country's sovereign debt climbed to P16.09 trillion at the end
of November 2024, which is P70.7 billion higher in October 2024. Of the total debt stock,
10.92 trilion or 67.87 percent, was domestic debt. Foreign debt meanwhile made up P5.17
trillion or 32.13 percent of the total debt stock. '°

Hence, this representation deems it vital that the Philippines stockpile strategic assets
such as BTC to serve important national interest such as providing financial stability, among
others. Through the BSP, a Strategic BTC Reserve is hereby created where 2,000 BTC will
be purchased annually over five years which will be held in trust for 20 years

The immediate approval of this bill is earnestly sou

MIGUEL $UJs R. VILLAFUERTE

> Bitcoin.com News. (2024, November 8). Putin declares Bitcoin ‘unstoppable’ amid dollar's waning global grip. Bitcoin com
News. hitps //news btcoin.com/putin-dectares-bitcoin-unstoppable-amid-doliars-waning-global-grip/

"The Blockchain, (2025, January 15). Malaysia considers crypio regulations following taiks with UAE leaders and Binarice CEO
CZ. The Blockchain, https //www.the-blockchain, com/2025/01/15imalaysia-considers-crypto-regulations-following talks-with-
Uae leaders-and-binance-ceo-cz/

"Thai PBS World. (2025). Blockchain leader urges swift action for strategic bicoin reserve. Thai PBS Word

https world thaipbs. or.thidetailblockchain-leader-urges-swit-action-for-strategic-btcorr-reserve/56130

‘Smith, M. (2024, December 1). Trump's plan for a stratogic Bitcoin reserve could inigger a crypto arms race and reshape the
{global economic order. The Conversation. htipstheconversation.corvirumps-plan-for-a-stralegic-bitcoin reserve-could-rigger-
‘a crypto-arms-race-and-reshape-the-global-economic-order-247277

* Bitbo io Treasures. (n.d.). Countnes. Bitbo 1O Treasures. tps. reasuries bitbo.iolcountries!

"°ABS-CBN News. (2025, January 7). Philippine debt ses to P16.09 tnlion in November as peso depreciates. ABS-CBN
"News. hitps:/hvww.abs-cbn.com/news/business/2025/1/7/philippine-debt-rises-to-p 16-08 trillion-in-novemer-as-Peso:
dopreciates- 1545

v


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

TWENTIETH CONGRESS
First Regular Session

421

HOUSE BILL NO.

Introduced by HON. MIGUEL LUIS R. VILLAFUERTE

AN ACT CREATING THE STRATEGIC BITCOIN RESERVE AND APPROPRIATING
FUNDS THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Short Title. This Act shall be known as the “Strategic Bitcoin Reserve Act.”

SECTION 2. Declaration of Policy. The State shall promote and maintain economic prowess,
including monetary stability and the convertibility of the peso, especially in times of crisis. With
the increasing role of cryptocurrency in the world's financial system, it is imperative to enact
measures aimed at diversifying our assets to ensure financial security.

SECTION 3. Definition of Terms.

(a) Airdrop means a gratuitous distribution of digital assets to holders of Bitcoin in a
broad, equitable, and non-discretionary manner.

(b) Bitcoin Purchase Program means the program established under section 5(a).

(c) Cold Storage means a method of storing a private key required to transact in Bitcoin,
with a nexus to a secure physical location, protected from unauthorized access and
isolated from any network connections.

(d) Fork means a change to the consensus mechanism of a distributed ledger that creates
a separate ledger, resulting in a new digital asset that shares a common transaction
history with Bitcoin up to the point of the change.

(e) Governor refers to the Governor of the Bangko Sentral ng Pilipinas (BSP).

(f) Strategic Bitcoin Reserve means the decentralized network of secure Bitcoin storage
facilities established pursuant to section 4(a).

SECTION 4, Establishment of Strategic Bitcoin Reserve.

(a) Establishment. — The Governor shall establish a decentralized network of secure
Bitcoin storage facilities distributed across the country collectively to be known as the
Strategic Bitcoin Reserve for the cold storage of Government Bitcoin holdings

(b) Purpose. — The Strategic Bitcoin Reserve shall be used for the generation,
safekeeping, and management of Bitcoin private keys associated with Government
Bitcoin holdings.

(c) Oversight. —The Governor shall be responsible for the ongoing monitoring and
auditing of the holdings of the Strategic Bitcoin Reserve.

(4) Decentralization. — The Governor shall ensure that the facilities of the Strategic
Bitcoin Reserve are geographically dispersed throughout the Philippines, to minimize
the risk of simultaneous compromise and to enhance the resilience of the Strategic
Bitcoin Reserve. The Governor shall select the locations for the facilities described in


subsection (a) based on a comprehensive risk assessment, prioritizing geographic
diversity, security, and accessibility.

(e) Participation. — The Governor shall consult and collaborate with the Secretary of
Defense, Secretary of Finance, Secretary of Information and Communications
Technology, Chairperson of the Securities Exchange Commission and industry experts
to ensure the highest level of physical and digital security for the Strategic Bitcoin
Reserve. They shall formulate rules and guidelines for the application of the provisions
of this Act as guided by internationally accepted standards and practices. They may
exercise such other powers as may be provided by their enabling laws which are
necessary to carry out the purpose of this Act.

(f) Retention of forks and airdrops. — The Governor shall ensure that, with respect to
Bitcoins controlled by the Strategic Bitcoin Reserve, all digital assets resulting from
forks of the Bitcoin distributed ledger and digital assets distributed via airdrops to
Bitcoin addresses are accounted for and reasonably stored in the Strategic Bitcoin
Reserve

(g) Prohibition on immediate sale. — No digital asset stored in the Strategic Bitcoin
Reserve that is the result of a fork or airdrop may be sold or otherwise disposed of
during the 5-year period beginning on the date of the fork or airdrop, unless explicitly
authorized by law

SECTION 5. Bitcoin Purchase Program.
(a) The Governor shall establish a Bitcoin Purchase Program which shall include the
following

1. purchase no more than 2,000 Bitcoins per year over a 5-year period, for a total
acquisition of 10,000 Bitcoins;

2. conduct purchases in a transparent and strategic manner to minimize market
disruption;

3. hold Bitcoin acquired under this section in trust for the Philippines, as provided in
this section; and

4. establish a procedure to adjust the purchase schedule set forth, if necessary, based
on prevailing market conditions.

(b) All Bitcoins purchased under the Bitcoin Purchase Program shall be placed in the

Strategic Bitcoin Reserve.

1. Minimum Holding Period — To ensure the long-term stability and security of the
Strategic Bitcoin Reserve, the Governor shall hold all Bitcoin acquired through the
Bitcoin Purchase Program for not less than 20 years. During the minimum holding
period, no Bitcoin held in the Strategic Bitcoin Reserve may be sold, swapped,
auctioned, encumbered, or otherwise disposed of for any purpose other than
retiring outstanding government debt instruments.

2. One year before the end of the minimum holding period under section 5(b1), the
Governor shall submit to Congress recommendations on whether to continue to
voluntarily hold or to allow for the gradual and controlled release of a portion of the
holdings of the Strategic Bitcoin Reserve.

3. Upon the expiration of the minimum holding period, the Governor shall not
recommend selling more than 10 percent of the assets of the Strategic Bitcoin
Reserve during any 2-year period.

(c) Not later than one year after the date of enactment of this Act, and annually thereafter
for a period of 20 years, the Governor shall publish an annual public report on the
status of the Bitcoin Purchase Program.

SECTION 6. Proof of Reserve System. The Governor shall establish a quarterly Proof of
Reserve System of public cryptographic attestation under which the Governor shall

{a) publish quarterly reports on the Strategic Bitcoin Reserve that include detailed

information on the total holdings, transactions, and demonstrated control of private


keys relating to the Strategic Bitcoin Reserve, including a public cryptographic
attestation;
(b) make the quarterly reports available to the public on the official website of the BSP;
and
(c) select an independent, third-party auditor with expertise in cryptographic attestations
to verify the accuracy and integrity of the quarterly reports.
The Monetary Board shall conduct regular oversight of the following in compliance with this
Act:
(a) the Strategic Bitcoin Reserve;
(b) the quarterly reports under section 6(a); and
(c) the audit reports under section 6(c)

SECTION 7. Protection of Private Property Rights. Nothing in this Act shall be construed
to:
(a) authorize the government to seize, confiscate, or otherwise impair any property right
in the lawfully acquired Bitcoin holdings of any person; or
(b) infringe upon the rights of individuals, businesses, or organizations to purchase, hold,
transfer, or dispose of Bitcoin in accordance with the law.

This Act affirms and protects the rights of persons to maintain full lawful control over the Bitcoin
and other digital assets of those individuals, recognizing that the ability to maintain self-
custody of private keys is fundamental to the principles of financial sovereignty, privacy, and
personal liberty in the digital age.

SECTION 8. Implementing Rules and Regulations. Within sixty (60) days from the effectivity
of this Act, the BSP shall promulgate the rules and regulations to implement the provisions of
this Act.

SECTION 9. Appropriations. The amount necessary to implement the initial provisions of
this Act shall be charged against the current budget of the BSP and other concerned agencies.
Thereafter, such amounts as may be necessary for the continued implementation of this Act
shall be included in the annual General Appropriations Act.

SECTION 10. Separability Clause. If any provision of this Act is declared invalid or
unconstitutional, the other provisions not affected by such declaration shall remain in full force
and effect.

SECTION 11. Repealing Clause. All laws, executive orders, administrative orders, and rules
and regulations inconsistent with this Act are hereby repealed or amended accordingly.

SECTION 12. Effectivity. This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation.

Approved,