Philippine Congressman Miguel Luis “Migz” Villafuerte filed House Bill 421, titled the “Philippine Strategic Bitcoin Reserve Act,” proposing the establishment of a government-managed Strategic Bitcoin Reserve.
The bill directs the Bangko Sentral ng Pilipinas (BSP) to purchase 2,000 Bitcoin (BTC) annually for five years, totaling 10,000 BTC, valued at approximately $1.1 billion at current market prices. The reserve would be held in trust for at least 20 years, with sales or transfers prohibited except for retiring government debt.
The BSP would store the Bitcoin in cold storage across multiple secure facilities and provide quarterly proof-of-reserves reports for transparency. The bill positions Bitcoin as “digital gold,” citing its 40% compound annual growth rate over the past five years and its potential to hedge against economic volatility and rising sovereign debt, which reached 16.09 trillion pesos ($275 billion) by November 2024.
Villafuerte highlighted global trends, noting El Salvador’s Bitcoin adoption, Bhutan’s holdings of 10,565 BTC, and similar proposals in Brazil, Switzerland, and Poland. If passed, the Philippines would be the first Asian nation to legislate a sovereign Bitcoin reserve, surpassing El Salvador’s 6,276 BTC.
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The proposal reflects growing global interest in integrating cryptocurrencies into national financial strategies. By holding Bitcoin, valued for its historical 40% compound annual growth rate, the Philippines could diversify its reserves, traditionally dominated by fiat currencies and gold, to hedge against inflation and currency depreciation.
This could stabilize the economy during global financial crises or peso devaluation, given the sovereign debt of 16.09 trillion pesos ($275 billion). The bill’s provision to use Bitcoin only for retiring government debt could reduce fiscal strain, potentially lowering interest rates and freeing up budgetary resources for development projects.
If passed, the Philippines would be the first Asian nation to establish a sovereign Bitcoin reserve, potentially attracting international attention and positioning the country as a forward-thinking financial hub. This could draw foreign investment in fintech and blockchain sectors.
A government-backed Bitcoin reserve could boost confidence in the cryptocurrency market domestically, encouraging businesses and individuals to adopt digital assets, which could stimulate economic activity. Bitcoin’s price volatility (e.g., dropping from $103,332 in 2024 to ~$110,000 currently trading around $116,607) poses risks.
A market crash could reduce the reserve’s value, impacting fiscal planning if not managed carefully. The bill’s requirement for quarterly proof-of-reserves reports and secure cold storage by the Bangko Sentral ng Pilipinas (BSP) could enhance transparency and trust in public institutions, setting a precedent for robust cryptocurrency regulation.
The BSP’s historical caution toward cryptocurrencies due to risks like money laundering may create friction in implementation, requiring clear regulatory frameworks to balance innovation and security. A Bitcoin reserve could attract partnerships with crypto-friendly nations or firms, fostering technology transfers and economic collaborations.
By diversifying away from dollar-dominated reserves, the Philippines could reduce reliance on traditional financial systems, aligning with nations exploring alternatives amid global economic shifts. A government-endorsed Bitcoin reserve could catalyze the development of a domestic blockchain ecosystem, encouraging startups in decentralized finance.
To manage the reserve and related technologies, the government may invest in blockchain education programs, fostering a skilled workforce and positioning the Philippines as a regional tech hub. With 37% of Filipinos unbanked (as of 2023 BSP data), a government-backed cryptocurrency initiative could promote digital wallets and blockchain-based financial services.
The Philippines, a major recipient of overseas remittances ($36.7 billion in 2023), could leverage Bitcoin’s low-cost, fast transactions to reduce remittance fees, increasing disposable income for families and stimulating local economies. To support the reserve, the Philippines could explore Bitcoin mining, leveraging its renewable energy potential (e.g., geothermal and solar).
The bill’s requirement for multiple cold storage facilities could spur investments in cybersecurity and physical infrastructure, enhancing technological capabilities. A Bitcoin reserve could signal the Philippines as a crypto-friendly destination, attracting foreign direct investment (FDI) in tech and finance sectors. In 2023, FDI inflows were $9.2 billion; a crypto-friendly policy could boost this figure.
If Bitcoin appreciates significantly, profits from the reserve could be reinvested into social programs, infrastructure, or education, addressing inequality (the Philippines’ Gini coefficient was 0.41 in 2021). Small and medium enterprises (SMEs), which account for 99.5% of Philippine businesses, could adopt Bitcoin for transactions, reducing costs and accessing global markets.
By leveraging Bitcoin’s potential, the Philippines could attract investment, create jobs, and enhance its global financial standing. However, success hinges on robust regulation, public education, and sustainable practices to mitigate risks. If implemented effectively, this bold move could catalyze long-term economic and technological development, aligning the Philippines with the evolving global digital economy.