Philippines weighs bill to create bitcoin reserve
A proposal to establish a Strategic Bitcoin Reserve in the Philippines has garnered both support and caution, with a crypto industry leader highlighting the opportunities and dangers, while Camarines Sur Representative Miguel Luis Villafuerte is urging Congress to pass the bill.
Arlone Abello, Executive Director and Founding Chairman of the Innovative Movement Of The Philippine Association of Crypto Traders (IMPACT), said a Bitcoin reserve could strengthen the country’s financial position but warned of steep risks.
“A Bitcoin reserve could make the Philippines financially stronger in the long term, but it also brings big risks because of our current economic situation,” Abello told SiGMA News.
On the potential benefits, Abello explained that Bitcoin’s fixed supply of 21 million makes it similar to digital gold. “It can protect against inflation, peso devaluation, or global shocks. Over the next 20 years, it could grow in value and help reduce the country’s $130 billion external debt. A Bitcoin reserve would also show innovation and may attract fintech investment.” However, he underscored volatility as a key concern. “Bitcoin is very volatile, with prices that can drop 50 to 80 percent quickly. This could cause huge losses if held during downturns. The money could also be better used for infrastructure, education, or healthcare,” he said.
Abello also cited risks of market manipulation, hacking, and corruption. “Spending $1.1 billion for 10,000 BTC may not be the best use of public funds, and taxpayers could end up covering the losses if values crash,” he added.
Seized assets as starting point
Abello suggested that instead of direct purchases, the government should start with seized or confiscated Bitcoin from scams or illegal activities.
“Best to start with seized or confiscated Bitcoin from scams or illegal operations,” Abello said. “The U.S. holds over 200,000 BTC from seizures, while Germany sold 50,000 BTC in 2024, earning $3 billion without using taxpayer money. For the Philippines, using seized assets would reduce pressure on the budget.”
He noted that raids in the country had already uncovered potential sources of the illicit activity. “The DICT (Department of Information and Communications Technology) reported over PHP1 billion ($17.5 million) in cryptocurrencies and e-wallets confiscated during POGO (Philippine Offshore Gaming Operators) raids. These cases are linked to scams and money laundering. While reports often say ‘cryptocurrencies,’ Bitcoin is usually involved, and cold wallets are often used for BTC storage. This means there is already a supply of seized assets that could be repurposed for reserves.”
Still, Abello said combining seizures with purchases could work. “Another option is direct government purchases. The BSP (Bangko Sentral ng Pilipinas) could buy 2,000 BTC per year as the bill suggests, providing steady and transparent accumulation. This would show strong government commitment and could help stabilise Bitcoin’s price through institutional demand. In the end, the best option may be a hybrid approach combining seized BTC and direct purchases.”
The readiness question
Abello also assessed whether the Philippines was ready to build such reserves. “There has been progress. The country ranks 8th worldwide in crypto adoption, with over 12 million users, or about 10 percent of the population. The BSP regulates exchanges, digital banks are growing, and GCash already reaches 80 million people,” he said.
But challenges persist. “Only 25 percent of adults are financially literate, and many rural areas lack banking and internet access. Corruption and debt could lower trust in government-led crypto projects. Unlike Singapore or the U.S., the Philippines does not yet have fully mature systems.”
“The Philippines has strong potential but is not fully ready yet. Careful planning, gradual steps, and strong education efforts are needed. Starting with seized assets could be the safest first step before making major purchases,” Abello concluded.
Villafuerte’s push for strategic bitcoin reserve
The proposal for a Strategic Bitcoin Reserve was introduced by Villafuerte. In his explanatory note, Villafuerte argued that with Bitcoin increasingly recognised worldwide, the Philippines should not be left behind. He highlighted how countries such as El Salvador, Brazil, Germany, Switzerland, Poland, Hong Kong, Bhutan, Russia, Malaysia, and Thailand are adopting or considering Bitcoin reserves.
Villafuerte pointed to the country’s growing debt as a factor. “This is timely as the Bureau of Treasury recently issued a report that the country’s sovereign debt climbed to PHP16.09 trillion ($281.7 billion) at the end of November 2024, which is PHP70.7 billion ($1.23 billion) higher [than] in October 2024. Of the total debt stock, PHP10.92 trillion ($191.2 billion) or 67.87 percent, was domestic debt. Foreign debt, meanwhile, made up PHP5.17 trillion ($90.5 billion) or 32.13 percent of the total debt stock.”
He said it was “vital that the Philippines stockpile strategic assets such as BTC to serve important national interests such as providing financial stability, among others.”
Bill’s key provisions
The Strategic Bitcoin Reserve Act seeks to authorise the country’s central bank to establish secure cold storage facilities distributed across the country for Bitcoin holdings. The bill sets out a Bitcoin Purchase Program under which the BSP would buy no more than 2,000 Bitcoins per year over five years, totalling 10,000 BTC, and hold them for at least 20 years. It also requires quarterly proof-of-reserve audits with cryptographic attestation, independent third-party verification, and public reporting.
The proposed bill requires the BSP Governor to oversee the reserve, in consultation with the Departments of Finance (DOF), Defence, Information and Communications Technology, the Securities and Exchange Commission (SEC), and industry experts. It also mandates retention of forks and airdrops, prohibits immediate sale of reserve assets, and limits disposal even after the holding period to no more than 10 percent every two years.
