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- The enthusiasm behind a Bitcoin reserve bill is dying down with some Republicans voting against the move.
- Despite the immediate political setbacks, there is an expectation most governments will adopt the strategy in the future.
The establishment of a Bitcoin reserve in the United States has come under severe attack amid divisions among Republican members. Proponents of Bitcoin reserve are now considering it an important tool for hedging against inflation in the US. However, the current splinters in the Republican party leave the question of whether a strategic Bitcoin reserve is still possible in the US.
Division Among Republican Party Members
Clearly, the crypto market made huge gains from President Donald Trump’s second-term victory in the White House. Still, the political sphere regarding creating a strategic Bitcoin reserve is shaky.
Several US states have tried to set up their own Bitcoin reserves over the last few months. As mentioned in our previous news brief, 15 US States submitted proposals in January to establish a strategic Bitcoin reserve. This figure has since increased to about 30 states, emphasizing the rising interest in Bitcoin as a reserve asset.
The goal of most of these proposals is centered around prioritizing Bitcoin in major financial decisions of the states. The lawmakers behind these bills are fighting for Bitcoin as a hedge against ongoing inflation in the country.
These proposals have strengthened the faith of the industry participants. Many are optimistic that approving a few successful proposals would trigger billions in new acquisitions. In a recent update CNF covered, asset manager VanEck suggested that US states could acquire around 247,000 BTC if proposed Bitcoin reserve bills move forward.
Despite optimistic expectations, the Bitcoin reserve movement hit a setback earlier today. Montana lawmakers passed a 41-59 vote against a Bitcoin reserve proposal. It is important to note that the negative votes came from many Republicans. This is deduced from the fact that the Montana House of Representatives currently has 58 Republicans and 42 Democrats.
North Dakota, a state dominated by the Republicans, saw an even higher number of defections. Likewise, colleagues of leading national pro-crypto advocate, Senator Cynthia Lummis, rejected a Bitcoin Reserve.
What Next for the US Bitcoin Reserve
The rejection of Bitcoin reserve bills by several Republican states suggests that President Trump’s party could become a major obstacle. On the contrary, President Trump strongly advocated for a national Bitcoin reserve plan during his election campaign.
The President recently signed an executive order from the crypto work group to assess the potential for a national crypto asset stockpile. Still, several Republican members have not completely aligned with President Trump’s vision.
More opposition from the Republicans can eventually doom the project. Meanwhile, Utah recently advanced its proposal, while Texas’ new Lt. Governor called a Reserve a “top priority” for 2025. However, some Republicans argue the plan is too risky for taxpayer funds.
Although the recent division among Republicans is a major roadblock, they do not prove that a Bitcoin Reserve is doomed. The industry strongly supports this regulation and might put major political capital behind it.
