US Bitcoin Policy: Reserves, Custody, and Lawmaking

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• They contain (1) a summary of podcast content, (2) potential information gaps, and (3) some speculative views on wider Bitcoin implications.
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Summary

The September 16, 2025 episode of New Foundations features Zack Cohen explaining Washington’s evolving approach to Bitcoin across legislation, reserves, and custody. Cohen outlines partisan dynamics, the Genius Act’s stablecoin regime, the Clarity Act’s non-custodial protections, and the Bitcoin Act’s sovereign-reserve proposal. He links custody standards and developer liability to national competitiveness while warning against partisan branding that could destabilize long-term policy.

Take-Home Messages

1. Partisan risk: Avoid branding Bitcoin as aligned with any one administration to preserve durable, bipartisan support.
2. Stablecoin regime: The Genius Act enables onshore issuance and compliance while reshaping competition with offshore models.
3. Builder protections: Clarity Act language on non-custodial software is pivotal to keep open-source wallet and privacy tools viable.
4. Custody standard: Multi-institution custody reduces single-point failure and fits public treasuries’ insurance and continuity needs.
5. Sovereign signal: A U.S. Bitcoin reserve would carry outsized economic and geopolitical impact compared to other policy levers.

Overview

Zach Cohen anchors outreach with scale: Bitcoin is now a multi-trillion-dollar asset that policymakers can no longer ignore. He reports strong Republican alignment with administration priorities following an executive signal that framed Bitcoin as strategically relevant. With Democrats, he differentiates between tech-friendly moderates and progressives who respond to human-rights and anti-authoritarian use cases.

He cautions that tying Bitcoin too closely to a single political figure risks backlash and policy reversals. Lingering stigma from prior anti-Bitcoin rhetoric still shapes Democratic hesitation, though polling and funding dynamics now reward pro-Bitcoin positions. He argues lawmakers face limited downside in supporting Bitcoin and potential electoral risk in opposing it.

On strategy, Cohen says a U.S. strategic Bitcoin reserve likely triggered global attention and quiet accumulation incentives. He contrasts sovereign accumulation with high U.S. private ownership and asks whether private balances can substitute for state reserves. He notes government holdings could reduce future seizure incentives by securing public upside in advance.

Execution depends on custody and law. He outlines three pathways in a state toolkit: ETFs for constrained mandates, multi-institution custody to avoid single-custodian risk, and insured, timelocked self-custody for maximal control. He highlights the Genius Act’s stablecoin framework, Clarity Act protections for non-custodial developers, and the Bitcoin Act’s proposal to revalue gold to fund sovereign purchases.

Stakeholder Perspectives

1. Federal policymakers: Sequence reforms to avoid partisan lock-in while calibrating reserve signals and market stability.
2. Senate Banking/committees: Balance non-custodial safe harbors with enforcement optics and ethical-conflict concerns.
3. State treasurers/CIOs: Prefer multi-institution custody with insurance and audits; use ETFs when mandates constrain direct holding.
4. Institutional CFOs/treasurers: Require multi-institution custody, continuity plans, and attestation; minimize single-custodian concentration risk.
5. Open-source developers: Need clear liability limits so wallet and privacy tools can be developed and maintained.

Implications and Future Outlook

Legislative sequencing will shape developer activity and institutional on-ramps more than rhetoric alone. If non-custodial protections advance and multi-institution custody becomes normative for public funds, U.S. competitiveness in Bitcoin financial services strengthens. Failure to pass clear safe harbors risks chilling open-source work and pushing innovation offshore.

Sovereign accumulation is a global coordination problem with scarce supply and strong first-mover advantage. A credible U.S. reserve policy could catalyze parallel moves abroad and reprice risk across treasuries and commodities. Absent clarity, quiet accumulation and rumor can amplify volatility and complicate public finance.

Stablecoin rules will influence domestic payments, bank strategies, and convertibility with offshore tokens. Genius-compliant issuers may pursue interoperability while bearing higher oversight and collateral standards. The outcome determines whether dollar-stable rails complement or compete with bank deposits at scale.

Some Key Information Gaps

1. How can Bitcoin advocates prevent the asset from being permanently branded as partisan? Sustained bipartisan framing is essential to reduce policy volatility and protect long-term adoption.
2. How should the U.S. communicate its strategic Bitcoin reserve policy to balance secrecy and market stability? Credible, timed disclosures can limit front-running while signaling intent to allies and markets.
3. Should U.S. dominance in private Bitcoin holdings substitute for formal state reserves? Clarifying trade-offs informs fiscal strategy, national security posture, and geopolitical leverage.
4. What legal frameworks best protect open-source developers from liability under financial regulations? Safe harbors for non-custodial code reduce chilling effects and keep critical software maintained.
5. How will U.S. policymakers adapt sanctions strategies in a Bitcoin-integrated global economy? Identifying alternative levers preserves influence as chokepoint control over payment rails declines.

Broader Implications for Bitcoin

Strategic Reserves Realignment

A credible sovereign-reserve policy for Bitcoin would pressure central banks to diversify away from sole reliance on bonds and gold. Reserve competition could reinforce dollar influence if paired with Genius-compliant stable rails, or dilute it if the U.S. lags peers. Hybrid reserve models blending Bitcoin with legacy assets are likely to emerge.

Public Finance and Tax Capacity

Rising private Bitcoin wealth concentrates unrealized gains outside traditional banking, shifting tax timing and base volatility. Governments that standardize MIC and auditability can better integrate holdings into public finance while safeguarding assets. This reshapes debt management and could lower funding costs if reserves back credibility.

Open-Source Security as National Capacity

Legal clarity for non-custodial code elevates open-source maintenance from hobbyist work to critical infrastructure. Nations that protect and fund this layer gain resilience across payments, custody, and identity tooling. Over time, talent migration will favor jurisdictions with predictable liability regimes.

Payments Architecture and Bank Models

Genius-aligned stablecoins can become settlement media for retail and B2B flows, changing deposit dynamics and fee structures. Banks that custody Bitcoin and stablecoins within MIC frameworks will compete on risk governance rather than exclusivity. The result is a modular stack where banks, issuers, and treasuries interoperate on audited collateral.

Sanctions and Alternative Leverage

As chokepoint control wanes, influence shifts to export controls, cyber defense, and coalition-based compliance around on- and off-ramps. Intelligence on reserve movements and large-holder behavior becomes a diplomatic instrument. Policy capacity moves from blocking transactions to shaping incentives and standards.