Standard Chartered says funding of US Strategic Bitcoin Reserve could involve selling gold as a 'budget-neutral' option

Standard Chartered’s Geoff Kendrick has highlighted a potential strategy for funding the newly established U.S. Strategic Bitcoin Reserve (SBR) in a budget-neutral manner — selling a portion of the country’s vast gold reserves to buy bitcoin.

“The next question is what could constitute budget-neutral strategies, and in theory, the following could be done, to sell gold and buy bitcoin," Kendrick said in an email. He added that the U.S. government holds $760 billion of gold.

This follows President Donald Trump’s overnight signing of an executive order officially establishing the Strategic Bitcoin Reserve and a Digital Asset Stockpile, marking a historic shift in the federal government’s approach to digital assets. The order mandates that any future government acquisitions of bitcoin for the reserve must follow budget-neutral strategies, ensuring no incremental costs to American taxpayers.

Under the new directive, all bitcoin currently held by the U.S. government will be transferred to the Strategic Bitcoin Reserve — with a clear stipulation that none of it will be sold.

Other potential budget-neutral strategies

Kendrick also suggested additional budget-neutral strategies that could be explored. One option, he said, is using the Exchange Stabilization Fund (ESF), which holds $39 billion in net assets. While the ESF is traditionally used to stabilize liquidity during financial crises, Kendrick noted that repurposing it for bitcoin purchases “would be a clear change of direction.”

Another possibility is the Bitcoin Act 2024, introduced by Senator Cynthia Lummis, which proposes buying 200,000 bitcoin per year for five years. Kendrick suggested that, if structured appropriately, the Bitcoin Act “could be passed and worked into a budget-neutral way.”

President Trump is expected to expand on the Strategic Bitcoin Reserve during his remarks at the White House Digital Assets Summit on Friday. However, Kendrick cautioned that immediate policy implementations are unlikely, noting that Treasury Secretary Scott Bessent will play a critical role in shaping and executing the acquisition strategy. “In reality, I cannot see any of these three solutions being delivered today," Kendrick said. "Rather, they would all require Treasury Secretary Bessent to propose something, given the importance placed on Bessent in the executive order).

Global and market reactions

Kendrick suggested that U.S. states and institutional investors, including long-term pension funds, could be encouraged to allocate to bitcoin following the federal government’s lead.

The Standard Chartered head of digital asset's research also emphasized that the formalization of a U.S. Strategic Bitcoin Reserve could spur other sovereign nations to follow suit.

“I have written previously about how a U.S. strategic reserve, whatever it looks like, can embolden other sovereigns." Kendrick said. "At the end of December, Abu Dhabi held 4.7k BTC equivalent of IBIT. Other sovereigns will now surely join the buying.”