Philippines Eyes Strategic Bitcoin Reserve: House Bill 421 Proposal
Philippine Congressman Miguel Luis Villafuerte has recently proposed House Bill 421, which seeks to position the Philippines as the latest contender in the global trend of nations allocating part of their reserves to Bitcoin (BTC). The proposed legislation envisages the country purchasing 2,000 BTC each year over five years, culminating in an acquisition of 10,000 BTC that would be held for a minimum of 20 years.
The rationale behind this legislative initiative, as articulated by Villafuerte, hinges on the growing importance of Bitcoin in bolstering financial and economic stature across different regions. He emphasised that such significant legislative measures are essential for the country’s fiscal strategy.
Key aspects of House Bill 421 include stringent restrictions on the sale or exchange of the acquired Bitcoin, permitting disposals only for the purpose of repaying government debt. Once the initial holding period concludes, the central bank would be allowed to offload a maximum of 10% of the Bitcoin reserves every two years.
Global Context of Strategic Bitcoin Reserves
As the Philippines contemplates this forward-thinking financial strategy, it is notable that there are only a limited number of countries that have incorporated Bitcoin into their national reserves. Currently, only El Salvador and Bhutan have established SBRs, with Bhutan leveraging its hydroelectric resources for Bitcoin mining, while El Salvador harnesses geothermal energy generated from volcanic activity.
Further discussions are underway in other nations regarding the establishment of Bitcoin reserves. For instance, Brazil is deliberating the creation of a proposed US$17 billion (AU$26.2 billion) reserve. Meanwhile, the US is making strides towards its own SBR initiative, although Australia has explicitly stated it will not pursue similar paths.
In contrast, several Asian countries, including China, South Korea, and Japan, are gravitating towards stablecoins pegged to their respective currencies, often as a strategy to mitigate the influence of the US dollar.
Current Global Bitcoin Holdings
In terms of Bitcoin assets, data indicates that sovereign entities currently possess approximately 2.4% of the total 21 million BTC available. The United States and China stand out as the predominant holders in this sphere, leaving the UK marginally behind in the race.
As the Philippines moves forward with the proposal, its implications for the economy and the broader acceptance of cryptocurrency at a sovereign level could send ripples across the global financial landscape.
