US House Appropriations Committee Pushes Forward Bitcoin Custody Legislation
The United States House Appropriations Committee has taken a significant step by advancing H.R. 5166, a pivotal financial services and general government spending proposal for the fiscal year 2026. This legislation mandates the Treasury Department to articulate a comprehensive plan for managing Bitcoin and other digital assets acquired by the federal government, specifically targeting assets designated for the newly established Strategic Bitcoin Reserve. This development was formalized on September 5, 2025, and is detailed in House Report 119-236, which has been added to the Union Calendar.
Legislative Call for Transparency in Bitcoin Reserve Management
At the legislative core, Section 138 of the bill compels the Treasury to formulate and publicly disclose a robust plan within 90 days of the bill’s enactment. This plan is expected to ensure the “secure and efficient custody” of federal digital assets, which includes those allocated to the Strategic Bitcoin Reserve as well as the US Digital Asset Stockpile. The proposal must outline the custody framework, legal authority, cybersecurity measures, and interagency processes for transferring and safeguarding these assets.
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In addition, Section 137 of the bill requires a thorough report on the feasibility of establishing both the reserve and the accompanying stockpile. This report should address potential challenges, the anticipated impact on the Treasury Forfeiture Fund, the presentation of Bitcoin and other digital assets on the federal balance sheet, and the involvement of third-party contractors for custody purposes. Collectively, these sections urge the Treasury to clarify the federal government’s long-term strategy for Bitcoin holdings and its implications for government accounting and forfeiture mechanisms.
Ensuring Accountability and Security
The accompanying committee report emphasizes Congress’s intent to monitor the transfer of seized assets into the program. It mandates the Treasury to provide monthly reports detailing the activity of the Forfeiture Fund, including any reallocations to the Bitcoin Strategic Reserve and/or the digital asset stockpile. The report underscores the importance of robust safeguards to prevent loss, unauthorized access, or liquidation of assets.
This legislative push follows six months after the White House issued Executive Order 14233, which established both the Strategic Bitcoin Reserve and the US Digital Asset Stockpile by consolidating government-owned crypto assets seized in criminal and civil proceedings. The executive order emphasizes that government-held Bitcoin should not be sold, positioning it as a strategic asset for national purposes, and instructs Treasury and Commerce to explore budget-neutral methods for acquiring additional government-held Bitcoin.
The inclusion of the national security community in this legislative initiative highlights the multifaceted nature of digital asset custody. Section 139 of the bill calls for a classified report from the Treasury Secretary and the Director of the National Security Agency within 90 days of enactment, signaling that lawmakers view digital asset custody and management as both an operational and financial concern.
Legislative Landscape and Future Prospects
Parallel efforts to codify the reserve are underway, with separate bills such as H.R. 2112 and H.R. 2032 being introduced to provide legislative backing to the executive order and propose decentralized, cold-storage networks for government BTC. While these standalone bills remain unenacted, the appropriations route of H.R. 5166, if successful, would impose a deadline for the Treasury to deliver actionable plans shortly after the bill’s enactment.
Anticipated Changes with the Enactment of H.R. 5166
Should H.R. 5166 become law, the Treasury would be obligated to produce a comprehensive custody blueprint, moving beyond internal documents or ad-hoc practices for asset seizures. Additionally, Congress would gain insight into how the Strategic Bitcoin Reserve and stockpile interact with forfeiture processes and the federal balance sheet, providing critical information for potential program expansion.
The classified NSA-Treasury report would formalize security coordination around wallet infrastructure and interagency asset transfers. Collectively, these measures would transition the federal government’s Bitcoin management from ad-hoc liquidation to a strategic reserve approach aligned with the March 6 policy, which prohibits the sale of reserve Bitcoin.
However, it is important to note that the bill does not allocate Bitcoin, authorize open-market purchases, or permit immediate asset transfers into the reserve. It establishes reporting and planning requirements contingent on the underlying appropriations bill’s enactment. The House-reported text must still pass the full House, Senate, and reconciliation processes before reaching the President’s desk, making the timelines prospective.
Current Market Context
As of now, Bitcoin is trading at $112,700, reflecting the dynamic and evolving nature of the cryptocurrency market.
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