The US Treasury is developing a custody framework for the Bitcoin held by the federal government, combining self-custody and third-party options. This initiative aims to improve the accuracy of reporting on Bitcoin holdings, ensuring Washington knows exactly what it owns and where it is stored.
The framework supports two models: self-custody, where the government holds private keys, and third-party custody, where specialized firms safeguard those keys. This effort follows a review of agency holdings, originally mandated by an executive order in March 2025, which created the Strategic Bitcoin Reserve.
The reserve, built from forfeited Bitcoin acquired through law enforcement actions, holds between approximately 198,000 BTC and over 328,000 BTC. The range varies based on whether coins tied up in pending litigation are included. The Treasury's plan does not directly respond to any security breaches but aligns with increased scrutiny of cold wallet security.
Patrick Witt, a senior crypto policy advisor, mentioned ongoing discussions about publicly disclosing the government’s specific holdings and exploring additional acquisition routes. Any expansion beyond forfeitures would require further legal analysis. The no-routine-sales provision in the executive order has already shifted the government's approach from selling to holding Bitcoin.